Over the past few months, I’ve written a 7-part series on Bidenomics, reviewing the president’s record on issues such as subsidies, inflation, protectionism, household income, fiscal policy, red tape, and employment.
Regarding the last item, a big problem is that the share of the population with jobs (measured by either the labor-force participation rate or the employment-population ratio) has not recovered.
It hasn’t recovered to where it was before the pandemic and it hasn’t recovered to where it was before Obama took office.
That’s bad news. Our economy’s output (and our national income) depends on the quantity and quality of both labor and capital.
This does not reflect well on Biden.
But not everyone agrees. Paul Krugman has leapt to the President’s defense. He even claims that American workers are enjoying a “Biden boom.”
President Biden has presided over a huge employment boom… Bidenomics has been good for American workers, whether they know it or not. …Haven’t they seen the purchasing power of their wages fall, thanks to inflation? The answer is yes, but. …that decline was entirely caused by rising prices for food and energy, which have a lot to do with global forces and little, if anything, to do with U.S. policy… If you want to assess the impacts of Bidenomics on wages, you should probably compare wages with prices excluding food and energy. And on that basis, real wages have basically been flat since Biden took office. …So, yes, the Biden boom has been good for workers.
The most shocking part of the column is that Krugman never addresses the problem of missing workers.
I’m not joking. You can read his entire article and you won’t find anything about the labor-force participation rate or the employment-population ratio.
He does mention the number of people working and wants us to believe those numbers are a cause for celebration, but even he felt the need to acknowledge that, “the job gains under Biden probably reflected a natural recovery from lockdowns.”
And I think it’s worth noting that we have 4 million fewer jobs than Biden claimed we would have if his so-called stimulus scheme was approved.
In other words, the president’s policies almost certainly have hindered the natural recovery that should have occurred.
Now let’s tackle the issue of inflation-adjusted wages for the people who do have jobs.
Krugman claims that workers have enjoyed a “boom” because “real wages have basically been flat.”
But even that claim is only possible if you ignore what’s happened to prices for food and energy.
Call me crazy, but this is the economic equivalent of “Other than that, Mrs. Lincoln, how was the play?”
The bottom line if that inflation-adjusted wages have been falling during Biden’s tenure.
I’ll conclude by noting that Krugman could have written a column blaming the Fed for the weak employment data. That would have been legitimate.
And he could have written a column arguing that Trump had the same big-spending policies when he was in office. That also would have been legitimate.
Instead, he wrote a column that may be even more of a joke than his “exploding cigar” about Estonia.
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Image credit: 00Joshi | CC BY-NC-SA 2.0.
