25 December 2023
Examining the Reality of Bidenomics and Its Effects on Labor Market, Inflation, and Public Perception
In the midst of the Gaza conflict and its fallout, the term “Bidenomics” emerged as a topic of debate. While interest in the concept has waned, it is crucial to examine its impact on the economy and American workers. President Joe Biden defines Bidenomics as an approach that prioritizes building the economy from the middle out and bottom up, rather than top-down. This article delves into the three pillars of Bidenomics: smart investments in America, empowering American workers, and promoting competition. By analyzing various indicators, such as the labor market, inflation, and public perception, we can assess the effectiveness of Bidenomics.
The Biden Economy: Assessing the Impact
Labor Market Strength and Mixed Evaluations
By conventional indicators, such as the unemployment rate, the economy appears strong. However, public sentiment tells a different story. While job growth has slightly dipped below its long-term average, the labor market still displays signs of strength, with unfilled job openings and worker confidence. Wage increases for low-paid workers have led to some decline in inequality, but differing data sources present a less satisfying picture. According to the Federal Reserve Bank of Atlanta, workers in the bottom half of the pay distribution experienced consecutive yearly real wage declines. The University of Michigan’s consumer sentiment survey reflects negative evaluations of the current economy, with only a quarter of respondents believing that Biden’s economic policies have been helpful.
Rising Prices and Declining Approval
Despite a slight easing of inflation, household finances continue to face strain. A significant percentage of the population finds it difficult to pay bills, and stress from price increases remains prevalent, particularly among low-income individuals. Evaluations of the economy, as measured by the University of Michigan’s consumer sentiment survey, are below average and lower than during recessions. The majority of respondents report feeling worse off since Biden became president, with rising prices being the primary economic threat and source of financial stress.
Critics and Defenders of Bidenomics
Critics argue that the evaluations of the Biden economy are accurate, pointing to the realities of living in the current economic climate. Temporary COVID-relief measures provided immense help to millions of people, but their temporary nature limits their impact. Biden’s focus on “smart investments in America” and pro-union sentiments has been seen as a departure from previous Democratic administrations. The three major investment bills, including the Bipartisan Infrastructure Law, the CHIPS Act, and the Inflation Reduction Act, aim to stimulate the economy through private investment. However, concerns arise regarding the reliance on private capital and the lack of significant public investment and efforts to combat fossil capital.
The impact of Bidenomics on the economy and American workers remains a topic of debate. While conventional indicators suggest a strong economy, public sentiment paints a different picture. Rising prices and declining approval ratings indicate the challenges faced by households. The Biden administration’s focus on smart investments and pro-union sentiments marks a departure from previous Democratic administrations. However, criticisms arise regarding the reliance on private investment and the lack of significant public investment. As the Biden economy continues to evolve, it is essential to monitor its effects on American workers and the broader economy.