The average American has lost $4,200 in annual income since President Biden took office — completely wiping out gains under the Trump administration, an analysis by the Heritage Foundation shows.
The losses come down to rising inflation and higher interest rates, experts at the conservative think tank said in a report Thursday.
Their analysis found that the average American has lost about $3,000 in annual purchasing power because consumer prices, which have risen 12.7% since January 2021, have risen significantly faster than wages.
Wages have risen just 8% over the same period, effectively leading to a pay cut for Americans who struggle to pay for daily necessities, including food, gas and rent.
Higher interest rates and borrowing costs have also reduced the average person’s purchasing power by another $1,200, according to the report.
“Put simply, working Americans are $4,200 poorer today than when Biden took office,” said EJ Antoni, a researcher in regional economics at the Heritage Foundation’s Center for Data Analysis.Read:Good news: Freight railroads are not on strike. Bad news: The service is still terrible
“This financial catastrophe for American families is the direct result of a president and Congress addicted to spending our money, combined with a Federal Reserve enabling this addiction by printing more dollars.”
Under the Trump administration, Heritage said the average American’s annual income had increased by $4,000.
Antoni said Americans are in a “vicious spiral” and many have taken on additional debt to cope with the increased cost of living.
“Now the Fed is finally fighting inflation, driving interest rates up and borrowing costs soaring,” he said. “The interest rate on all kinds of consumer debt is rising. Mortgage interest rates have doubled since Biden took office, significantly increasing Americans’ monthly payments.
Many New Yorkers complained that they feel that squeeze.
Street sweeper Fiona Santiago, 32, told The Post she has been forced to travel from her lower Manhattan home to Brooklyn to save money on groceries.Read:‘There is no innocent explanation’: Newly released FBI files reveal Ponzi schemer Bernie Madoff’s dramatic confession as agents arrested him
“Everything is going up, so it’s impacted me a lot,” she said, adding that she’s becoming more out-of-pocket now. “It was tight, but I tried to make it. It mainly affects low income.
“I don’t even shop in my own neighborhood. I shop in Brooklyn so I could afford it. Where I am is worse, I have to go to Brooklyn to buy my food,” she continued. “Milk is almost $5!”
Marie Shulman, who sells handmade jewelry in markets across the city, said the cost of a taxi or Uber from her Upper East Side apartment to SoHo has more than doubled for her as inflation rises.
“As for the cost of goods, transportation and other things — it’s like eating some of my profits,” she said. “Then (a car ride) it cost $30 to get here. Now I have to pay $60 — and $100 on the weekend to get back home.”
Shulman said even the cost of her jewelry inventory has gone up.
“It’s literally almost double and my price stays the same,” she said.
Meanwhile, companies already ravaged by COVID-19 are now also struggling to survive due to inflation.Read:US economic barometer drops for sixth month in a row, potentially ‘signaling a recession
“It’s impacting the business because people are now waiting more time between clippings,” Arthur Iskhakov, who runs the Barbers Blueprint in Little Italy, told The Post.
“So they get clipped less often. COVID has destroyed our business more than anything else and now inflation is no longer helping.”
Concerns about continued inflation rose again this month as federal data showed consumer prices rose 8.3% in August compared to the same month a year earlier — a figure worse than economists had expected.
Biden downplayed the worse-than-expected data, suggesting that an improvement in gas prices was a sign that inflation was beginning to moderate.
“Today’s data shows more progress in reducing global inflation in the US economy,” Biden said in a statement last week.
“Overall, prices in our country have been essentially flat for the past two months. That’s welcome news for American families. There’s still more work to be done.”
Additional reporting by Mingmei Li