Real Household Income Takes Another Hit

Real Household Income Takes Another Hit
The National Debt Clock is seen at a bus stop in Washington on July 31, 2023. (Madalina Vasiliu/The Epoch Times)
Jeffrey A. Tucker

The statistics on real household income—a rather impactful data set—come out only once per year. That’s regrettable but also meaningful because they incorporate how inflation affects our lives. They just appeared concerning 2022, and perhaps you won’t be surprised.

We hit another skid. It’s the third year in a row that average Americans have lost ground.

It’s bad. Really bad. You can completely ignore all the propaganda coming from the White House. They say we have the strongest economy in the world. The trouble is that the reset is global. Arguably, we are in a worldwide recession that was kicked off by the global lockdowns of March 2020. We are still suffering from them.

Very probably, we will continue to do so for years unless there is some dramatic change.

Americans’ inflation-adjusted median household income fell to $74,580 in 2022, declining 2.3 percent from the 2021 estimate of $76,330, the Census Bureau said. The amount has dropped 4.7 percent since its peak in 2019. That’s a massive loss. Interestingly, the drop was biggest in the West, Midwest, and the Northeast, while the South—which opened earlier and had fewer COVID restrictions—had unchanged household income.

States in the South did the least damage to their citizens’ well-being. There are arguably two economies in the United States, the states that locked down the most, versus those that locked down the least. Compare New York City to Miami, or San Francisco to Houston. We really are talking about different worlds. Still, if we want to continue to think of the United States as a nation as a whole, there is genuine trouble.

This provides an opportunity for me again to beat a drum on my own theory that we have never really left the recession of March 2020. Everything else has been cosmetic. The jobs numbers are all over the place and continue to be revised downward, while giving a strong indication that most “job creation” has consisted of the conversion from full-time positions to part-time positions held not by choice.

As for output, it has floated between around 1 percent and 3 percent on a national basis, with a substantial contribution by government spending. That isn’t real output. That’s better classified as wealth consumption. In addition, spending by consumers has come out of savings, which is very low, and fed a historically high increase in credit card debt.

All these factors can put lipstick on the recession pig but not change the underlying reality. In any case, there’s enough fluidity and potential manipulation in these numbers as to make the overall figure meaningless.

The Census Bureau numbers come from a very different source and tend to be more reliable. Median household income adjusted for inflation is the real deal. It shows precisely how many resources consumers and families actually have coming in. In this sense, the United States has been extremely hard hit with a bout of dramatically lower living standards. No amount of presidential speechifying can change what is really going on in the bank account.

(Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker)
(Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker)

Correctly, some commentators are starting to call this the “quiet recession.” It hasn’t been declared because the output data don’t support the technical definition. Even so, all the signs of a dramatic downturn are everywhere in sight. You feel them. So does everyone.

More alarmingly, this gradual impoverishment might not actually be an inadvertent outcome of policy. That might in fact be the whole point of the policy. President Joe Biden keeps shutting down drilling and bragging about it. Life gets ever harder for farmers and small businesses. U.S. foreign policy is all about reducing everyone’s “carbon footprint” in the name of stopping the scientifically dubious “climate change emergency” that credible experts say isn’t even a real thing.

I’ve been spending the past few days reading Klaus Schwab’s 2020 book called “The Great Reset.” It’s a kind of manifesto of what I’ve called techno-primitivism or degrowth corporatism. The goal isn’t the creation of wealth for all; it’s to train the public to live off ever less and be ever more dependent on a ruling-class elite empowered to make decisions on the use of resources. It frowns on everything traditional, including beef and oil, while exalting in the deployment of infinite digitization and screen-time slavery.

It’s a chilling book by any standard, fully designed as a template for the world to replace freedom and human rights traditionally understood. It claims that COVID was more than a bug on the loose. It was a turning point in the history of civilization that will forever reorder economies, politics, and societies all over the world.

That’s precisely what alarmed me about March 2020. It felt at the time like the onset of some martial law that was deployed for some specific purpose. Nothing has happened in the 3 1/2 years since then to disabuse us of our worst suspicions. The new income figures strongly suggest that we haven’t left the crisis but rather keep burrowing deeper into it. We are indeed getting poorer. Hardly anyone in the mainstream of media, tech, or academia seems to care much.

The lockdowns were the calamity of our lives. They pushed the “off” button on liberty and said they would turn it back on. But no one in power has pushed the “on” button. That’s because the entire metaphor is wrong and even evil. The suffering is getting worse rather than better. The demoralization, illiteracy, dependency, and even resource availability of the public seems to be accelerating.

Incredibly, it was done in the name of public health. If that’s true, why was the intelligence community listed in their own organizational charts as the lead agency? Why did the Federal Emergency Management Agency have an even larger role than the Centers for Disease Control and Prevention? We need to get to the bottom of this with serious investigations.

Ideally, there would be justice as well, but we are nowhere near that point.

Have we learned the lesson? It isn’t possible simply to shut down society. Try it and you wreck things no one human mind can possibly understand. You also invite scoundrels such as Mr. Schwab and Bill Gates to impose their delusions on a vulnerable public.

People the world over have put up with too much rubbish for too long, and we see the results. Leaders have failed us and dreadfully so. It’s time for them to go and be replaced by people who at the very least believe in freedom and prosperity. That seems to be what it’s going to take to reverse the trend.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Jeffrey A. Tucker is the founder and president of the Brownstone Institute and the author of many thousands of articles in the scholarly and popular press, as well as 10 books in five languages, most recently “Liberty or Lockdown.” He is also the editor of “The Best of Ludwig von Mises.” He writes a daily column on economics for The Epoch Times and speaks widely on the topics of economics, technology, social philosophy, and culture.
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