American workers have effectively taken a pay cut for 24 straight months as inflation consistently outpaces wage growth on President Biden’s watch, according to federal data.
Real average hourly earnings — a measure of wages after adjustments for inflation — have declined year-over-year for every month dating back to April 2021 — just a few months after Biden took office, according to data from the Bureau of Labor Statistics.
House Speaker Kevin McCarthy (R-Calif.) highlighted the alarming trend in a speech at the New York Stock Exchange on Monday — arguing the Biden administration of “reckless spending” that has exacerbated the economic toll on US households.
“Americans have received a pay cut for 24 consecutive months — the longest streak in American history — as inflation has persisted,” McCarthy said in the speech.
“In fact, since President Biden took office, families have lost the equivalent of $7,400 worth of income,” he added.
For the latter figure, McCarthy appeared to be referencing a January analysis released by the Heritage Foundation, a conservative think tank.
EJ Antoni, a research fellow for regional economics, determined that the average American family was “effectively $7,400 poorer under Biden” through that month.
To reach that figure, Antoni told The Post he pulled federal data on average weekly earnings of US workers and then adjusted for inflation to calculate the typical American’s “lost” wages.
He then multiplied that result by two — assuming each family has at least two workers.
To complete the calculation, Antoni factored in increases in the cost of borrowing as the Federal Reserve hiked interest rates over the last year to tame inflation.
As of this month, Antoni said he estimates that the average family’s annual income has plunged by $7,100 under Biden’s leadership — a slight improvement compared to January, but still a significant hit to cash-strapped families.
That total includes roughly $5,600 in wage losses due to inflation, plus an estimated average increase of $1,500 in additional expenses from forms of borrowing that became more expensive due to rate hikes, such as mortgage payments, student loans and credit card bills.
Antoni said he pulled that information from publicly available federal data sets from the New York Fed and other sources on specific borrowing categories — and then matching those numbers to current interest rates.
“The financial pain inflicted on American families will not stop until the runaway spending comes to an end,” Antoni told The Post. “Yet Biden advocates for more of the same, as if to say, ‘the financial beatings will continue until morale improves.’”
Wage-based calculations are a subject of debate among economists — with some arguing that real wages aren’t the best way to measure purchasing power.
McCarthy went after Biden’s policies as Republicans and Democrats clash in negotiations over the federal debt ceiling.
Republicans have pledged not to approve a higher borrowing limit until the Biden administration agrees to slash spending, while Democrats say the increase should pass without any string attached.
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