New analysis fact-checks McCarthy’s claim that Biden has cost families $7400

18 April 2023

A new analysis is pushing back on House Speaker Kevin McCarthy's (R-Calif.) argument that American families are now more than $7,000 poorer since President Joe Biden took office.

According to The Washington Post, McCarthy's remarks were made on Monday, April 17.

Responding to the inquires about McCarthy's remarks, E.J. Antoni — who serves as a regional economics research fellow for the Heritage Foundation’s Center for Data Analysis — attempted to break the numbers down during a phone conversation.

Per the Post:

“Nominal earnings are multiplied by CPI in Jan. ’21 and divided by the latest month’s CPI,” Antoni said. That yields a loss of $2,802.77 or 5.1 percent. He assumes a typical family has two parents working, so he doubles that figure to come up with $5,605.53.

However, reporter Glenn Kessler offers a fact-check of those figures.

"McCarthy was citing a figure that Fox News promoted in January. The numbers may change from month to month, and so it’s slightly improved since then," Kessler wrote. "Antoni’s most recent calculation is that the average American family is $7,100 poorer since Biden took office. That still doesn’t sound good."

Kessler's also noted that economists have also weighed in with skeptical reactions to Antoni's calculations. Donald R. Grimes, an economic specialist at the University of Michigan, offered his take in an email.

“We lost a disproportionate number of low-wage jobs during the early stages of the pandemic,” Grimes said in an email. “As the economy recovered more fully from the pandemic (which is what occurred during the first couple years of the Biden presidency) the average went down because we were disproportionately adding more lower-wage workers in industries like accommodation and food services.”

Mark Zandi, chief economist of Moody’s Analytics, also shared a different perspective to reach a more accurate total.

“I would use real disposable income per capita,” said Zandi. “It is the most comprehensive consistent measure of how well Americans are doing from a government source. It accounts for all income, and it is after-tax and appropriately accounts for inflation.”

Martin Neil Baily, the former Council of Economic Advisers chairman, also echoed Zandi's remarks saying, “Real disposable income per capita is much better measure.”

“The personal income per capita does incorporate the additional income that is earned by more people working,” Grimes added. “The personal income per capita data also includes unearned income, for example, it includes all those stimulus checks, unemployment benefits, etc. So it really is a broader measure of economic welfare than wages.”

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