Treasury Secretary Janet Yellen will next week advance the growing effort among administration officials looking to convince voters that Bidenomics is benefiting ordinary Americans, despite more than two years of punishing inflation.
“Workers are better off than they were last year,” Yellen said in an excerpt of a speech she’s scheduled to deliver Monday in Las Vegas, released Friday by the Treasury. “Real average hourly earnings have grown over the past year — meaning that wage gains are outpacing inflation.”
She’ll deliver the remarks at a training center run by the International Brotherhood of Electrical Workers, a trade union.
It may be a tough sell. After Yellen predicted a spike in inflation triggered by the pandemic would prove “transitory,” the annual change in consumer prices has run faster than 3% for 28 straight months, and hit a four-decade peak of 9.1% in June 2022.
It has since slowed to 3.2%, but the experience has rattled American households conditioned to expect low and steady price rises since the 1990s.
Yellen highlighted the historically low level of unemployment — 3.5% in July, which has helped drive up worker paychecks. She pointed to data showing annual wage growth, which lagged inflation since April of 2021, began outpacing prices again in May.
She also flagged a paper from MIT economist David Autor showing the hot labor market in the wake of Covid-19 has benefited low-pay workers the most, driving an unexpected compression in the gap between what college graduates earn over those with less education.
“This has had a sizable impact on reducing inequality,” Yellen said. “I expect the important gains that we’ve made over the past 2 1/2 years to serve as a source of resilience in the weeks and months to come, even if we see further cooling in our economy.”
About 15 months ahead of the next president election and a possible rematch between President Joe Biden and his predecessor Donald Trump, would-be voters appear not to be giving Biden much credit on the economic front.
The website FiveThirtyEight, which aggregates polling data, puts Biden’s most recent approval rating at 40%. A recent CBS News poll found just 30% of respondents believed their income was keeping up with inflation, and 29% rated the economy as “good.”