Keynesian economist Paul Krugman is at it again.
In a fresh New York Times blog post, Krugman discussed the “Biden Boom” in the labor market, writing that workers have never had it better, thanks to President Joe Biden’s policies.
Here is what he wrote (emphasis ours):
“President Biden has presided over a huge employment boom… Bidenomics has been good for American workers, whether they know it or not. …Haven’t they seen the purchasing power of their wages fall, thanks to inflation? The answer is yes, but. …that decline was entirely caused by rising prices for food and energy, which have a lot to do with global forces and little, if anything, to do with U.S. policy… If you want to assess the impacts of Bidenomics on wages, you should probably compare wages with prices excluding food and energy. And on that basis, real wages have basically been flat since Biden took office. …So, yes, the Biden boom has been good for workers.”
But this is absurd reasoning.
The first is that 40-year high inflation has been broad-based, so even if Krugman wanted to remove crucial food and energy prices from the mix, this would be disingenuous arguing and still disprove his assertion.
Second, perhaps economist Daniel J. Mitchell said it best when he recently opined, “Call me crazy, but this is the economic equivalent of ‘Other than that, Mrs. Lincoln, how was the play?'” Why the heck would anyone erase soaring food and energy prices when talking about inflation and the cost of living for the American people?
In the end, real wage growth (inflation-adjusted) is around four percent.
If there is one area of expertise that Paul Krugman has, it’s his innate ability to formulate straw-man arguments to try to support his flawed positions.
The old trick of picking the areas where inflation was strongest and choosing to remove them from the data is absolutely bonkers! Either you incurred the expense, or you didn’t. But just like any good political economist, Krugman will pick and choose what data he wants to present that might support his flawed arguments. Just like what happened when Nixon was president, and he instituted wage and price controls, there was the sudden appearance of new cuts of beef at the butchers counter. Since these weren’t on the list of meats that existed in the minds of the government-folk, they were not able to be placed under the price controls.
In the end, any weasel will try to figure out ways to take essential facts out of the data, so that they can say they were right. And this is exactly what Krugman does in his straw man argument.
“writing that workers have never had it better ”
In 1974 I graduated high school, with almost zero skills I was paid $9.10 per hour (Union Shop). That would be equal to $57.84 today. I would like to ask krugman what his definition of better is with a $7.25 minimum wage. We all know that the minimum wage is the wage floor that corporations start from. A higher $15 to $20 minimum wage would be good for everyone making more than minimum wage. Because people making less than the new minimum wage would see an immediate pay raise.