Fact Check: Biden Falsely Claims Americans Are Better Off and They Know It
CLAIM: President Joe Biden on Friday claimed that the American people know that they are better off financially than they were before his presidency.
“I think they know they’re better off financially than they were before. It’s a fact,” Biden said. Biden is asked about why Americans aren't happy about the economy: "You all are not the happiest people about what you report. You get more legs when you report something negative... I think [Americans] know they're better off financially than they were before. It's a fact." pic.twitter.com/ZWM9kX0Pdk — Greg Price (@greg_price11) October 6, 2023 Biden is making two claims here. First, that the American people are better off than they were before his presidency. Second, that the American people know that they are better off. Both are untrue.
The unemployment rate during Biden’s presidency has averaged 4.2 percent. During the Trump presidency, unemployment averaged five percent. If Biden had confined his claim to merely saying that unemployment has been lower on average during his presidency than during Trump’s, he would have been telling the truth. Of course, the pandemic introduced a high level of unemployment and makes comparisons difficult. Most Americans understand that the level of unemployment during the pandemic was not reflective of a president’s economic management but an extreme exogenous factor. So it makes sense to exclude the pandemic from the calculation.
The pre-pandemic average unemployment rate during Trump’s presidency was 3.9 percent. Under Biden in the post-pandemic period it has averaged 3.7 percent. So, the score is closer, but the edge still goes to Biden. What makes Biden’s claim false is that inflation has run so much higher during his presidency. During Trump’s presidency, the average annual increase in the consumer price index was 1.9 percent. During Biden’s presidency, inflation has averaged six percent. Of course, it probably makes sense to take the pandemic period out of these calculations also. Because the pandemic saw inflation fall very low, excluding it raises the Trump administration average—but only to 2.1 percent.
The Biden administration’s post-pandemic average (officially, the pandemic ended in May of this year) is 3.6 percent. One way of looking at whether Americans are better off is called the misery index, which combines inflation and unemployment to produce a measure of, well, misery. During Trump’s presidency, the misery index averaged 6.9. During the Biden presidency, it has averaged 10.2. So, when you add inflation and unemployment together, people have been much worse off under Biden than under Trump.
The scores are closer if we exclude the pandemic.
The Trump pre-pandemic misery index averages 6.9 and the Biden index since May is 7.2. Biden’s claim is still false but the contrast is less stark. Another way of measuring whether people are better off is to look at real disposable income, which is inflation-adjusted income minus taxes. In the final full year of the Trump administration, total disposable income was $16.6 trillion. Last year, under Biden, disposable income fell to $16.1 trillion. Another way of looking at this is that real disposable income grew in every year of Trump’s presidency. It rose in Biden’s first year as president but fell in the second year. We can also look at average hourly wages.
These increased eight percent under Trump from February 2017 through September 2019. Under Biden’s presidency, average wages are up 12.75 percent. Unfortunately, inflation has eaten away at wage gains. Under Trump, inflation ate 4.9 percentage points of the wage gains, leaving workers with a real average gain of 3.1 percent. Under Biden, inflation cost 15 percentage points so far, flipping the real wage gains negative. Average hourly wages are down 2.25 percent under Biden. As for the idea that Americans know they are better off, every poll shows quite the opposite. An ABC News/Washington Post poll showed that 4 in 10 Americans say they are worse off under Biden’s presidency, the most in polls dating back 37 years. In the most recent Gallup poll, 48 percent of Americans say they rate the economy poor, and another 32 percent said they rate the economy “only fair.” That’s a combined negative assessment of 80 percent. Back in January of 2021, as Trump was leaving office, 33 percent said economic conditions were poor, and 39 percent said they were only fair. That combines for a negative assessment of 72 percent. That was in the middle of the pandemic, of course. Three years into Trump’s presidency, eight percent of the public rated the economy poor and 30 percent only fair, a combined negative of 38 percent. So, in looking at equivalent periods during their administration, Trump’s economy was 42 points ahead of Biden’s. Gallup’s measure of economic confidence registered a score of 40 at the end of Trump’s presidency. This past September, it registered negative 39, a 79 point decline. So, the truth is the opposite of Biden’s claims. Americans are worse off under Biden, and they know it.
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