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The 2 big reasons (one obvious, one subtle) why real median household income declined in 2022

  – by New Deal democratLast week, with its usual very big lag, median household income was reported by the Census Bureau for 2022. If, given big…

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 - by New Deal democrat


Last week, with its usual very big lag, median household income was reported by the Census Bureau for 2022. If, given big wage gains and hiring in 2022, you were expecting a significant increase, well, that didn’t happen. Instead, real median household income declined -2.3% from $76,330 in 2021 to $74,580:



Unsurprisingly, the WSJ was out of the box with an article crowing that it showed the failure of Bidenomics. And maybe more surprisingly, there has been little debunking from the progressive side.

Since I am all about the data, and letting the chips fall where they may, I decided to take my own in depth look. So, why did real median household income fall last year? There were two big reasons, one glaringly obvious, the other surprisingly subtle.

1. There were no COVID stimulus payments in 2022.

In 2020 and 2021, there were 3 rounds of COVID stimulus payments to almost all households. That’s a big reason why in 2020, despite massive job losses, real median household income only declined -2.0%. There were smaller stimulus payments in spring 2021, that helped real median household income hold up, relatively speaking, declining only -0.4%.

The stimulus payments in 2021 were $1400 per household member up to $2800. Even the smaller amount was equivalent to 1.8% of real median household income in 2021.

In 2022, those disappeared. So right off the bat, a decline in real median household income in the range of -1.8% to -3.6% might be expected.

And the Census Bureau confirmed the same, right on page 1 of its report:

“Real median post-tax household income exhibited a substantial decline in 2022 from 2021. This was due in part to the expiration of policies introduced in response to the COVID-19 pandemic, such as Economic Impact Payments and the expanded Child Tax Credit.”

It would be nice to know what real median household income would have been leaving aside the stimulus payments, but unfortunately that information is not contained in the report. But a -2.3% decline after payments of 1.8% or more of income ended is hardly out of the ballpark.

But the Census Bureau’s report does provide important further detail, because they *also* calculated real median household income based on wage and salary payments alone. Here’s what the page 1 summary said about those:

“The real median earnings of all workers (including part-time and full-time workers decreased 2.2% between 2021 and 2022, while median earnings of those who worked full-time, year round decreased 1.3:”



This is more problematic at first, but leads us to the second, surprising big reason that median income declined: 

2. The -6.1% decline in the broad stock market.

A big stock market decline is exactly what we *wouldn’t* expect to be behind a decline in earnings. But it comes in through the back door via a big decline in the vesting of stock options.

The first clue is that the lower quintiles of households generally did *better* in 2022 than 2021:



Here’s how the Census Bureau defines “income” on page 19 of the report (with some summary headers by me):

“[Wages, salaries, and other employment compensation:]
1. Earnings.

[Govenment transfer payments:]
2. Unemployment compensation.
3. Workers’ compensation.
4. Social Security.
5. Supplemental Security Income.
6. Public assistance.
7. Veterans’ payments.
8. Survivor benefits.
9. Disability benefits.

[Deferred employment compensation:]
10. Pension or retirement income.

[Investment income:]
11. Interest.
12. Dividends.
13. Rents, royalties, and estates and trusts.

[Other transfer payments:]
14. Educational assistance.
15. Alimony.
16. Child support.

[Miscellaneous others:]
17. Financial assistance from outside of the household.
18. Other income.”

First and foremost, note that investment income (but not capital gains) are included in the calculation of household income. While interest payments of *existing* investments generally did not benefit from the increase in rates, so did not raise income, the big decline in the stock market certainly *did* affect some dividend payments, as firms that are not doing well tend to cut or even forego dividends. That is going to take a chunk of income out of the leisure class, which did the worst in 2022.

But that isn’t the whole story, because remember that “earnings” alone declined in 2022. But it turns out that regular wage and salary payment omit a significant chunk of “earnings.” That’s because the vesting of stock options are frequently counted as earnings, as indicated by the IRS:

You have taxable income or deductible loss when you sell the stock you bought by exercising the option. You generally treat this amount as a capital gain or loss. However, if you don't meet special holding period requirements, you'll have to treat income from the sale as ordinary income. Add these amounts, which are treated as wages, to the basis of the stock in determining the gain or loss on the stock's disposition.”

When the stock market goes down, as it did in 2022, fewer stock options meet vesting requirements, which are usually tied to an increase in the company’s stock price. Less vesting means less cashing in, which means less income reported.

How big a deal was that in 2022? While we don’t have national figures, California does keep track of this, and its Department of Revenue noted how important it was last year. Let me give a little background first.

As you probably recall, I keep close track of tax withholding payments, which are based on earnings and, because of Social Security and Medicare caps, are not as distorted as other measures might be by billionaires’ compensations.

And in the last 4 months of 2022, tax withholding payments were virtually unchanged, even in nominal terms (i.e., before the 7.9% CPI increase), from the equivalent months in 2021, as shown in the below graph of the monthly YoY% changes for the past serval years:




Matt Trivisonno helpfully keeps track of the YoY% change of the entire previous 365 days of withholding payments, and as you can see from the below graph, for the entirety of 2022, withholding payments were only about 6.5% higher than 2021, i.e., about a -1.4% decline:



Additionally, the QCEW is a virtual census of all job gains and losses, and wage and salary payments for all employers. It is updated quarterly. For the 4 quarters of 2022, in chronological order the YoY% changes in payments were: +6.7%, +4.3%, +6.7%, and -2.3%. The 4 quarter average was +3.85%, well below the inflation rate.

Now let’s go back to California. Its Department of Revenue periodically updates how well its income tax withholding collections are doing in comparison with previous budget estimates. And in the last quarter of 2022, they fell off a cliff:



The Department of Revenue looked into the sudden falloff, and determined that the most likely reason was a huge shortfall in the vesting of stock options. As they explained:

 Some private sector employers pay employees bonus salary at different times of the year. Some bonuses reflect the overall business climate—notably holiday and year-end bonuses—while other bonuses are based on productivity. Productivity bonuses are often paid more frequently, typically at the end of each month or quarter. So far this fiscal year, income tax withholding during the last few days of each month, when bonuses are typically withheld, is far below 2021 levels. Specifically, the figure below shows that withholding during the final week of each month is 12 percent lower this year, despite withholding from the first three weeks of each month being higher in 2022. This dynamic reflects growing employment overall but a potentially sharp drop-off in month-end bonuses.”

It’s reasonable to suggest that California’s experience was not unique. And if the failure of stock options to vest caused a big shortfall in income tax withholding in the 4th quarter of last year, that would be very much in accord with the QCEW experience, and the poor YoY nationwide income tax withholding results late last year.

And that is in exact accordance with the income distributional chart supplied by the Census Bureau as to median earning income, shown above.

The final persuasive evidence comes from the below graph, in which I show the YoY% changes in average hourly earnings, aggregate nonsupervisory payrolls, nominal median household income, and inflation for the past 10 years:



Note the significant divergence of household income from jobs and payrolls in 2013 and 2014, and the large divergence in 2019. None of those years featured any huge economic upturn or downturn. But they *did* feature changes in tax law. The former featured the ending of the 2% withholding tax holiday, causing an increase in withholding in 2014 vs. 2013. The latter featured the taking effect of the pro-Billionaire tax law of 2018, but which also included a near doubling of the standard tax deduction and a slight decrease in many tax brackets.

In other words, significant changes in earnings income have on multiple occasions are Ibsen from either tax law changes and/or the behavior of financial markets.

One final caveat: nevertheless, the big increase in gas prices in early 2022 certainly did not help. As shown in the below graph of median real hourly wages, after the initial pandemic distortions higher (because mainly lower wage workers got laid off), after service workers were largely hired back, real hourly wages declined through mid-2022 before gradually rising back to trend:


Because aggregate payrolls rose so strongly, this probably was not enough without the additional downturn in the cashing in of stock options to translate into an actual decline in real median household earnings in 2022, but it certainly didn’t help.

Conclusion

The big decline in real median household income in 2022 was hardly a failure of “Bidenomics.” If anything, it reflected the success of Congressional stimulus payments under both the last year of Trump’s presidency, as well as the first year of Biden’s, in keeping the nation from a deeper downturn during the worst of the pandemic.

Further, the stock market decline of 2022 - which was largely responsible for the failure of stock options to vest - was more than anything else about the Fed’s aggressive rate hike policy, which was widely anticipated, and further widely anticipated to cause a recession, not because of any fiscal policies by Congress or the Administration.

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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