Biden claims his jobs plan ‘is working’ but inflation is surging, more than wiping out any wage gains American workers might have experienced.
What is all this “Biden inflation tax” talk really about? What is the actual effect of inflation on the lives of real people? Well, below is a chart that compares yearly wage and inflation rates for each month from 2017 through July of this year using Bureau of Labor Statistics data. Wage rates are in blue and inflation (as measured by the consumer price index) is in red. When blue is on top, as it was during the entire Trump administration, workers’ wages are beating inflation and their standards of living are improving. When red is on top, they’re not. While President Biden claims it is “indisputable” that his jobs plan “is working,” this chart unequivocally shows that it is not, at least not for American workers. Rather, inflation is surging, more than wiping out any wage gains those workers might have experienced. But the pandemic disrupted production and order flow, hobbling supply chains. Simply, people were unable to work and businesses were unable to anticipate future demand. Bad policies that pay people more not to work than they can make with a job have exacerbated the supply chain disruptions. You can’t produce and deliver goods if you can’t find workers. And there is a longer-lasting problem in addition to bottlenecks. As economist Milton Friedman stated, “Inflation is always and everywhere a monetary phenomenon.” Simply, the more money there is, the less it’s worth and the more it takes to purchase goods.
