Bidenomics is gaining no voter traction. To understand why, step back from all the technical economic indicators and look at economic life for key voters — the majority is falling farther and farther behind, faster and faster than ever.
On June 28, President Biden stood in front of Bidenomics banners to tout his achievements for the U.S. middle class. And, as he has done with any glimmer of good economic data, he followed that up on July 7 with what was effectively a self fist bump, touting new jobs numbers.
Still, two out of three voters disapprove of his economic performance, and no wonder — roughly two-thirds of American households are living paycheck to paycheck and/or skipping purchases they can no longer afford.
Is employment as good as the president claims? Yes, if you ask the Federal Reserve. No, if you look at the majority of Gen Xers who are still underemployed or can’t find jobs that make ends meet. More than one-third of Americans are out of the workforce, with this problem particularly acute for women in general and minority women in particular. Will Black voters turn out for Biden or stay home as they did in 2016, when Hillary Clinton told them the economy was in a good place, but Black Americans didn’t find themselves anywhere close to it?
“Robust” employment looks even worse when one looks at wages — the reason most people work. As of Wednesday, it cost $121 to buy what once cost $100 at the end of 2019. Looking at inflation-adjusted wages — not the nominal data the president prefers — the bottom 50 percent of American households would need to earn $5,000 more just to buy the same things it could the year before the pandemic.
Most Americans also don’t feel the “progress” against inflation on which rests Bidenomics’ putative appeal. According to the Fed’s most recent study of economic well-being, the percentage of Americans saying that they were doing worse than the year before rose to the highest level since the Fed’s survey began in 2014.
And no wonder. American wealth inequality is at one of its highest levels since the Fed began calculating it in 1989. Income inequality has improved a bit in recent years due to nominal increases in labor income, but overall income disparities remain pronounced. The top one percent takes home $2 million in average post-tax income versus the bottom 50 percent’s average of $39,274. Even before inflation really took off, a survey in January 2022 found that Americans thought they needed $128,000 in income to feel financially secure.
Biden is trying to persuade voters that happy times are here again. This was a hard campaign promise even from an orator as awesome as Franklin D. Roosevelt. Failing a sudden macroeconomic miracle, the only way Joe Biden can persuade Americans that he’s on their economic side is to understand the side they’re actually on and then target a critical source of persistent economic inequality by holding the Federal Reserve accountable for its manifest, manifold mistakes.
Karen Petrou is the managing partner at Federal Financial Analytics, Inc. and the author of “The Engine of Inequality: The Fed and the Future of Wealth in America.”