https://justthenews.com/nation/economy/thubidens-inflation-tax-already-erased-gains-workers-made-pay-even-democrats-fear-it
Biden 'inflation tax' erases gains in workers' pay, as Democrats' own economists admit fears
From Joe Manchin to Obama's top economic adviser, warnings grow that everyday workers are falling further behind after gains under Trump.
One promise from the U.S. economy emerging from the pandemic was that American workers would benefit from a tight labor pool driving up salary and pay. And while that happened, the benefits have all been erased by the sudden surge of inflation on President Biden's watch.
That means workers aren't running in place, they are actually falling behind as rising prices force middle- and working-class families to make hard choices, like whether to fill the gas tank or the refrigerator.
Inflation topped out at 5.4% in July, the government reported Wednesday, the third straight month above 5%. When President Trump left office in January, inflation was in check at just 1.4%.
Economists fear the multitrillion dollar spending that Biden and the Democrats launched in Washington — $4.5 trillion more was added by the Senate in a 24-hour period on Tuesday — is fueling the disadvantage.
"I support heating the economy one log at a time, not throwing them all on the fire at once," Harvard economist Jason Furhman, one of President Obama's top economic advisers, tweeted on Wednesday. "To the degree the [latter] leads to prices rising more than wages it won't leave workers better off."
Furhman should know. He created an analysis two weeks ago showing the wage-to-price ratio fell in the 2nd quarter of 2021, meaning workers lost buying power.
"Paychecks aren't going as far as they used to," he wrote. "Price increases have outpaced compensation growth in 2021, causing real compensation to fall. In June 2021, real compensation was 0.7 percent below December 2019 levels, and 2 percent below its pre-pandemic trend."
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