I’ve repeatedly explained (last July, last September, and this July) that Biden’s biggest economic problem is that wages are losing ground after adjusting for inflation.
The same thing is true when looking at overall household income.
The Census Bureau just released its annual report on Income, Poverty and Health Insurance Coverage in the United States, and here’s a chart from the data tables on median household income (adjusted for inflation).
The final two years, outlined in pink, show what happened in 2021 and 2022.
At the risk of understatement, this is not just an economic problem for the country, it’s also a political problem for Joe Biden.
To make matters worse, the Census Bureau noted that post-tax income declined even more than overall household income.
The U.S. Census Bureau announced today that real median household income in 2022 fell in comparison to 2021. …Real median household income fell by 2.3% from $76,330 in 2021 to $74,580 in 2022. …The real median earnings of all workers (including part-time and full-time workers) decreased 2.2% between 2021 and 2022, while median earnings of those who worked full-time, year-round decreased 1.3%. …Post-tax income is defined as money income net of federal and state income taxes and credits, payroll taxes (FICA), and temporary cash payments administered by tax agencies, like rebates or stimulus payments. …Real median post-tax household income in 2022 was 8.8% lower than in 2021.
While the Census Bureau’s report is not good news for Biden, my Republican friends should not get too excited.
Median household income dropped by more than $1,000 in Reagan’s first two years, and even dropped by a couple of hundred dollars in 1983, yet that did not preclude big improvements in 1984 and a landslide reelection for the Gipper.
So there is still time for Biden to turn things around, at least in theory.
But based on his dirigiste policy agenda (subsidies, inflation, protectionism, stagnant income, fiscal profligacy, red tape, and labor-force participation), my Democratic friends should be worried, at least in reality.
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Image credit: Gage Skidmore | CC BY-SA 2.0.
