RALEIGH, N.C. (WNCN) — Are you coming out of the pandemic in a stronger economic position than you were before?
For most people, the White House says, the answer is yes.
But a closer look shows that question is more complicated than it might seem.
“Like everything, the answer is yes and no,” said Connel Fullenkamp, a professor of economics at Duke University.
A statement from the White House this week referenced a study by three California economists that found between December 2019 and December 2021, disposable income for Americans went up by 5.3 percent after accounting for inflation — and the bottom half of earners saw an even larger increase in that real amount.
“These results underscore the effectiveness of the American Rescue plan and the Biden Administration’s ongoing efforts to recover from the pandemic and create an economy that provides prosperity for all Americans,” the statement read.
Michael Walden, a retired economics professor at North Carolina State University, said the White House got it right.
During the pandemic, he said, the median household income went up and the poverty rate fell.
“Typically during recessions or challenging economic times, we see a lot of the metrics that measure how average people are doing move backwards,” Walden said. “So, incomes fall, spending falls, poverty goes up. We didn’t see that this time.”
He says the main reason is the big spending by both the Trump and Biden administrations, most noticeably on those $1,400 relief checks.
“We had a massive amount of money that went into the economy, got into people’s hands,” Walden said. “And I think that’s the reason why the economic numbers are actually showing, contrary to what we would have thought, that through these tough years, many households actually saw their economic situation improve.”
Walden says the picture in North Carolina looks better than it does nationally. The state and national unemployment rates are comparable but the state’s gross domestic product is growing at a faster rate than it is across the rest of the U.S.
“That’s not necessarily because we’ve done anything different regarding COVID,” Walden said. “That’s just because we have been a faster-growing state for many decades.”
Fullenkamp has concerns about what happens down the road — most notably with the highest rate of inflation in four decades and skyrocketing housing prices.
“Those are long-term, really lasting impacts that are going to way outlive the short-run impacts of the stimulus package,” he said. “So that’s why I say it’s a yes-or-no picture.
“I find it a little bit disingenuous,” he added. “I don’t blame the administration for wanting to put a positive spin on this. We want people to feel good about the economy. But the longer-term picture is really less pleasant, I think.”
Those economists whose work was quoted by the White House also point out that for the middle 40 percent of earners, disposable income has actually dropped by 1.1 percent after inflation over the past year.
That might help explain why just 37 percent of people taking part in a CNN poll last week approved of the way President Joe Biden is handling the economy.
“The ‘missing middle’ is really seeing the pain at the gas pump, the pain at the grocery store and really feeling the fact that their purchasing power has gone down and gone down appreciably,” Fullenkamp said.
