The U.S. Census Bureau revealed Tuesday that American household incomes have dropped for a third consecutive year amid decades-high inflation and dwindling purchasing power.
The bureau’s new report, “Income in the United States: 2022,” indicated that real median household income after taxes fell 8.8% over the first two years that President Joe Biden was in office, while Democrats still controlled Congress.
During the same period, the poverty rate after taxes skyrocketed from 7.8% to 12.4%, and a significant number of Americans slid into the lowest quintile of earners. Over 37.9 million souls are presently living in poverty.
“We saw big increases in poverty across every sociodemographic group,” Luke Shaefer, a public policy professor at the University of Michigan, told Marketplace. “The biggest was among children. We saw child poverty more than double.”
The report further revealed that before taxes, median household income dropped last year by 2.3% to $74,580, $1,750 less than the median in 2021. That accounts for a 4.7% fall from where it stood in 2019, just prior to the outbreak of the COVID-19 pandemic in Wuhan, China.
These estimates are inflation-adjusted.
The report indicated that Boomers and older generations were largely unscathed by the drop, whereas householders under 65 saw a decline in median household income of 1.4% from 2021.
From 2021 to 2022, non-Hispanic white householders saw a 3.6% decline in median household income, while black householders and Hispanic householders saw a 1.5% and 0.5% increase, respectively.
Although all regions saw a drop, the Midwest was most adversely impacted, with a 4.7% decline.
The Census Bureau claimed that this worsening state of affairs “can be attributed to key changes in federal tax policy,” specifically the lapsing of the Biden administration’s pandemic policies like Economic Impact Payments, which helped drum up inflation in concert with supply chain disruptions and rising energy costs.
Biden rushed to blame congressional Republicans Tuesday for the results detailed in the bureau’s latest reports, even though Democrats controlled the House during the years in question.
“The rise reported today in child poverty is no accident,” Biden was quoted as saying in a statement. “It is the result of a deliberate policy choice congressional Republicans made to block help for families with children while advancing massive tax cuts for the wealthiest and largest corporations.”
Despite the bleakness of the bureau’s report, Bill Adams, chief economist at Comerica Bank, told the Wall Street Journal there is cause for hope.
“Shifting into the present and into the future, the prospects are better for wages to make up for some of the ground lost during the last couple of years,” said Adams.
As of December 2022, wage growth began to overtake inflation and inflation-adjusted wages reportedly rose by roughly 3% in July, according to data from the Atlanta Fed Wage Tracker and the U.S. Labor Department.
Inflation, while a remaining problem, appears to have slowed somewhat in 2023, going from an annual rate of over 9% last summer to roughly 3% in July.
Notwithstanding the optimism of some forecasters, others fear the president’s “Bidenomics” will compound Americans’ suffering under his watch.
Milton Ezrati, writing for Forbes, recently cast doubt on whether Biden’s proposed “watered-down version of China’s Marxist, centrally planned approach to economic organization” will turn out to be anything other than a disaster.
Ezrati is not the only one doubting Biden’s capabilities as it pertains to handling economy.
A recent Quinnipiac Poll revealed the majority of Americans think the nation’s economy is getting worse, and 58% of registered voters polled disapproved of the job he was doing on the economy.
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