WASHINGTON, DC- During the campaign, Joe Biden repeated ad nauseum that if he were elected, his administration would give the lower class a hand up. Unfortunately for the lower class, that hasn’t happened.
During the end of the Trump administration, the unemployment rate for black Americans fell for eight consecutive months, with black unemployment reaching historic lows.
Despite the fact the U.S. was dealing with the hangover from an unexpected pandemic, the unemployment rate for black Americans fell from 16.7 percent to 9.2 percent in January.
That recorded one of the fastest declines in unemployment in recorded history, according to Breitbart. That decline was short-lived however as the rate jumped back up to 9.9 percent in February, while recovering slightly to 9.6 percent in March.
However the malaise goes beyond black Americans. Low-income Americans across the board have all suffered setbacks in the early going of the Biden administration.
According to the Bureau of Labor Statistics, prices jumped at a higher rate than expected in March. With a rate showing an annual gain of 4.2 percent, that is the highest jump since 2011.
Breitbart acknowledged that the number is somewhat of an anomaly created in part by a lowering in demand for goods and services due to COVID-19 restrictions. However even the monthly gains exceeded expectations, climbing 1 percent compared with forecasts which showed half of that.
Not surprisingly, inflation tends to affect those at the lower end of the income scale more severely than others. Since a larger percentage of their discretionary income goes into current consumption, any rise in prices obviously affects the bottom line.
Likewise, those on the lower end of the income scale tend to keep whatever savings they may have in lower-interest bank savings accounts rather than in equities or other investments which act as a hedge against inflation. They are therefore more vulnerable to the affects of inflation and deteriorated buying power, Breitbart says.
When digging into March’s prices hikes however it becomes clear why the inflation currently taking place in the early days of Biden’s reign are having more of a negative impact for those on the bottom end of the income scale.
Breitbart noted that gasoline prices, which we have all seen go up around a dollar a gallon since November rose 8.8 percent in March alone. It should also be noted that the lower third of household incomes spend more per capita on transportation than the upper two thirds, according to data from Pew Charitable Trusts.
Data from 2019 showed that transportation costs, which gasoline is a major part of, accounted for 17 percent of all household expenditures, according to Statista; this is the second highest category only after housing.
Food is next, and accounts for 13 percent of household spending. The news isn’t much better there, because according to March’s Producer Price Index, food prices rose half a percentage point in March and 1.3 percent in February. Over the past year, foot prices have risen 5 percent.
Juxtapose that with how household spending affects upper income brackets. For example, the top third direct about 8 percent of household income on transportation, Pew noted.
Statista showed a bit of a higher percentage for top earners; however it was still significantly below that for lower earners. Food also affects higher income earners less; it takes up much less of a wealthier family’s income.
Breitbart also notes that upper income households can actually benefit from inflation, noting that such households “have more fixed-interest type debt that is paid back in depreciated dollars in an inflationary environment.”
Conversely, lower income households tend to have more of “floating rate debt, such as credit cards. Those rates tend to rise along with inflation. Likewise, lower income households tend to be renters, not homeowners and as such rents tend to rise with inflation, whereas mortgages remain fairly constant.
Breitbart reported that inflation, in particular food and gasoline price hikes in fact act as a regressive tax, which hurts low income households more than higher income households.
While Biden promised to deal with the “inequality” between the poor and wealthy by raising taxes only on “Americans making over $400,000,” the “stealth inflation tax-hike” on low income households is having a significant effect on lower income Americans.
This is Biden’s America.
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Of course back in January, Biden put tens of thousands of Americans out of work with the stroke of a pen when he stopped the Keystone XL pipeline. For more on that, we invite you to:
WASHINGTON, DC – On his first day in office, President Biden “disrespected” Canada and reportedly killed over 70,000 American jobs. Within hours of taking office, President Biden signed an executive order revoking the permit for the Keystone XL pipeline.
.@JoeBiden wasn’t in the White House for 30 minutes before he canceled the Keystone XL Pipeline & put THOUSANDS of Union workers out of a job with the stroke of a pen.
He canceled 1.6 BILLION dollars of Union contacts & 900 MILLION dollars in Union wages.
But hey, nice hashtag. https://t.co/ckjjXyGsu5
— Sean Parnell (@SeanParnellUSA) January 21, 2021
The Keystone XL pipeline is an oil pipeline system that was being built to connect oil fields in Canada with refineries in Illinois and Texas. The revocation of the permit will prevent the pipeline from being completed.
Ending construction of the pipeline will reportedly result in the loss of 11,000 direct jobs, and another 60,000 indirect jobs in support industries. The move has been blasted by both industry insiders and unions.
Biden Day 1 planned actions:
• Rejoin Paris Agreement
• Repeal Trump travel ban
• Halt border wall construction
• Mask mandate
• Extend eviction freeze
• Unveil immigration plan
• Extend student loan pause
• Revoke permit for Keystone XL pipelinehttps://t.co/qBPWklkEos
— NBC News (@NBCNews) January 20, 2021
Association of Oil Pipe Lines CEO Andy Black said:
“Killing 10,000 jobs and taking $2.2 billion in payroll out of workers’ pockets is not what Americans need or want right now”
The association said they “lamented” the permit revocation which “blocked thousands of new jobs and deprived those workers of billions of dollars in payroll salary.”
Construction of the pipeline was expected to create 10,000 high-paying, American union jobs. Under a Project Labor Agreement between four American labor unions, $2.2 billion in wages would have been paid to American workers. Additionally, the pipeline builder budgeted over $3 billion in contracts to U.S. contractors and suppliers. All new steel pipes for the pipeline were required to be made in the United States.
Canceling the Keystone XL pipeline is counter to President Biden’s message of unity. Thousands of hard-working Americans are now out of work and the progress we’ve made over the last four years in developing America’s energy independence hangs in the balance. pic.twitter.com/0sPoZk9Ubh
— Congressman Fred Keller (@RepFredKeller) January 21, 2021
The association also said that the Keystone XL pipeline project included significant environmental protections:
“Keystone XL would operate at net-zero GHG emissions. Its $1.7 billion investment in new, privately-funded renewable power infrastructure would provide 100% of the power to operate the pipeline.
The project sponsor also executed a renewable power MOU with North America’s Building Trades Unions to construct this renewable power infrastructure with a $10 million Green Job Training Fund for union workers.
“Blocking Keystone XL may ironically lead to an increase in greenhouse gas (GHG) emissions…Denying construction of Keystone XL means much of that crude oil will travel by train or truck instead, producing greater GHG emissions, more air pollution, and more traffic congestion.”
I’m disappointed in President Biden’s decision to end the Keystone XL pipeline and what this will do to the people of Montana.
See my letter from yesterday ⤵️ https://t.co/IX8J1HJ8Vu
— Matt Rosendale (@RepRosendale) January 21, 2021
Another point made by the association in a release posted on their website was that cancellation of the pipeline would adversely affect Native American communities:
“Native American partnerships in the project would generate more than $1 billion in equity ownership opportunities with input into construction and operations.
The project sponsor committed over $500 million for Native American suppliers and employment opportunities for tribal communities.
Rural America would lose out on over $100 million of annual property taxes that would have gone to rural communities.”
BREAKING: The new U.S. president issued a sweeping order tackling climate change, which included revoking the presidential permit for the Keystone XL pipeline. https://t.co/LnxcbLozEj
— CBC News (@CBCNews) January 20, 2021
North America’s Building Trades Unions also issued a statement reacting to the President’s decision:
“Environmental ideologues have now prevailed, and over a thousand union men and women have been terminated from employment on the project,”
While not denying the inevitable loss of jobs, Transportation Secretary nominee Pete Buttigieg claimed Thursday that the loss of jobs will be offset by new positions created by a shift in administration policy toward climate-conscious goals:
“I believe that the president’s climate vision will create more jobs on that. And I think it’s going to be very important to work with him and work with Congress to make sure that we can deliver on that promise too.
That on that, more good-paying union jobs will be created in the context of the climate and infrastructure work that we have before us than has been impacted by other decisions.”
Sen. Ted Cruz (R-TX) challenged Buttigieg asking, “So for those workers, the answer is somebody else will get a job?”
“The answer is we are very eager to see those workers continue to be employed in good-paying union jobs, even if they might be different ones.”
Opinion: Cancellation of the Keystone XL pipeline starts Biden and Canada on the wrong foot https://t.co/e7Vd1gtdTS
— The Washington Post (@washingtonpost) January 22, 2021
American unions and officials were not the only critics of President Biden’s termination of the pipeline. Canada’s Premier of Alberta Jason Kenney blasted the decision:
“We have the biggest bilateral trade relationship between Canada and the United States. But the biggest part of that trade is Canadian energy exports — largely from our province of Alberta.
We have the third-largest oil reserves in the world. We ship about $100 billion of energy to the U.S. every year. Keystone XL would have meant a significant, safe, modern increase in that shipment.
It is very — it’s very frustrating that one of the first acts of a new president was I think, to disrespect one of America’s closest friends and allies.”
This is not the first time President Biden has played a role in stopping the construction of the pipeline. In 2015, the pipeline was sidelined by then-President Barack Obama while Biden was his Vice President. President Donald Trump reactivated the pipeline’s construction in 2017.
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Author: Pat Droney
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