What’s your money worth? A series from the front lines of the cost-of-living crisis, where people who have been hit hard share their monthly expenses.
Name: Manisha Santosh Kadam
Age: 42
Born: Manchar, in the Indian state of Maharashtra
Occupation: Cook
Lives with: Her husband, Santosh, 48, their daughter, Rithuja, 21, and son, Sujal, 17.
Lives in: A 37sq-metre (400sq-foot) house in Diva, located in Maharashtra’s Thane district, which is about an hour’s drive from Mumbai, India’s financial capital.
The house, which is located on a busy street, has two small rooms – a medium-sized hall where all of them sleep together, and a kitchen. They do not have a garden or any open space.
Monthly income: Working as a cook for eight hours a day at a household in the Byculla area of South Mumbai, Manisha earns a wage of 17,000 rupees ($203.64) per month. India’s daily minimum wage is currently 176 rupees ($2.11).
Manisha’s husband works as an electrician and earns an erratic income ranging from 3,000 to 4,000 rupees a month ($35.94 to $47.92).
Total expenses for the month: 16,673 rupees ($199.72) on family living expenses. At the end of March, Manisha only had 327 rupees ($3.92) left in her bank account.
She also paid 90,000 rupees ($1,078) to repay a loan she had taken from the government to cover running costs at their family farm near the town of Manchar, where Manisha is from. She paid back the loan by borrowing money from friends and relatives.
Wednesday’s “disappointing” inflation data in the United States showed a jump from February, dampening expectations of an interest rate cut and raising concerns that inflation could remain stubbornly high.
The data has implications not just for the US Federal Reserve, which sets interest rates, but also for the candidates in the upcoming presidential election.
The core consumer price index (CPI), which excludes volatile food and energy costs, increased 0.4 percent in March from the previous month, according to government data released on Wednesday.
The year-over-year rate was unchanged at 3.8 percent. With food and fuel included, inflation is at 3.5 percent, up from 3.2 percent in February.
While inflation is much lower than the 40-year high of 9.1 percent reached in June 2021, when consumers went on a shopping spree with government cheques handed out during the COVID-19 pandemic, it is still well above the US central bank’s target of 2 percent.
The Fed has been on an interest-rate-hiking spree since March 2022, raising the benchmark overnight interest rate from near zero to the current 5.25 percent to 5.5 percent range, where it has been since July.
While that has helped dampen inflation, Wednesday’s data shows the fight is far from over.
“The 0.4 percent m/m gain in the March core CPI was a disappointment, as it surprised to the upside relative to our and consensus expectations for a 0.3 percent increase. This isn’t going to sit well with the Federal Reserve and may push more policymakers to favour two rate cuts this year, rather than three,” Bernard Yaros, lead US economist at Oxford Economics, told Al Jazeera.
The latest inflation data as well as last week’s jobs data – which showed the US economy added some 300,000 jobs last month, well above the expected 200,000 or fewer – has sparked some chatter that with such a strong economy, there might be no rate cuts at all in 2024, said Matt Colyar, economist at Moody’s Analytics.
“Inflation is moderating but happening more slowly than we anticipated,” Colyar told Al Jazeera, adding that the situation is making Fed Chairman Jerome Powell’s “unenviable job that much more unenviable with general elections in November”.
The last meeting before the elections is in mid-September, and Powell has indicated that the Fed is in no rush to cut rates.
“Monetary policy is an inexact science and takes time to take effect. But it’s a psychological effect – that first cut, it comes with the message that we’ve won the battle against inflation. It complicates things so close to the elections,” he said.
But those are also signs of a “strong economy” and that typically favours the incumbent, Colyar said.
“It’s the story of a really sturdy and resilient economy,” he said.
‘Singular focus on price’
While that may be good news on paper, voters still perceive the cost of living as too high.
“Wages are rising faster than inflation for a year now,” Yaros said. “Yet what people are looking at is prices – prices are 20 percent above where they were when [Joe] Biden was inaugurated [as president in January 2020], and that focus on price levels is what’s hurting the mood and Biden.”
While the latest inflation data shows that people are still consuming at a healthy rate, the average American feels poorer today because prices are higher.
“And people look at prices in isolation and not that their wages have also gone up,” Yaros said.
There is a “singular focus on price”, he said.
That’s also because “inflation is cumulative and it piles up”, said Dan North, senior economist at Allianz Trade.
For instance, he said, while wages are around 15 percent higher than where they were in January 2021, food is 21 percent more expensive, housing 31 percent and petrol 41 percent.
On Tuesday, the National Federation of Independent Business (NFIB) said its Small Business Optimism Index fell 0.9 points to 88.5 last month, the lowest level since December 2012. It was the 27th straight month the index was below the 50-year average of 98.
One-quarter of small business owners reported that inflation was their single biggest concern, up two percentage points from February. The percentage of businesses raising their average prices rose seven points.
“People still remember that it used to cost $40 for them and their spouse to get dinner at their favourite restaurant and now it’s $62. You don’t remember the pay raises you’ve gotten along the way,” Colyar said.
All of this is bound to play into the election and be an important deciding factor for which candidate – Biden or opponent Donald Trump – gets votes.
Yaros noted that people tend to hate high inflation much more than high unemployment.
“Inflation affects everyone while unemployment affects only a small section of the society,” he said.
All eyes will be on Friday’s US unemployment numbers to see how many jobs were added in March and whether the unemployment rate continues to stay in its historically low range or if it is time for the alarm bells to start ringing.
Job growth in the United States has continued at a steady clip in the months since the early days of the COVID-19 pandemic, when businesses came to a sudden stop.
“In the aftermath of the pandemic as things started to pick back up, there was a real struggle to find people to work and companies had to raise how much you paid to get people,” said Matt Colyar, an economist at Moody’s Analytics.
There are a number of factors behind that, including restrictions on the number of foreigners entering the country during the COVID-19 pandemic and baby boomers dropping out of the workforce for fear of the pandemic, creating nearly a shortage of some two million workers aged 55 and older.
As business ground to a halt as a result of the pandemic, nearly 22 million jobs were lost. A lot of the hiring since then has been about refilling those roles, said Dan North, senior economist at Allianz Trade, adding: “It’s not like those jobs went away.”
Since the start of the pandemic, the US economy has lost 21,888,000 jobs and has added 27,387,000, according to Allianz Trade data. “You could argue that the economy has created only 5,499,000 new jobs,” said North.
But jobs are being created, nonetheless. While employment fell by 243,000 jobs in December 2020, following seven consecutive months of increases, the labour market has consistently added jobs each month since then, taking the US economy on a 38-month streak of monthly job gains.
If payroll employment is shown to have risen in March in Friday’s monthly jobs report, which is released at 8:30am local (12:30 GMT), then it will be a 39-month streak.
Healthcare and state sector driving jobs
While jobs in the leisure and hospitality sectors are still catching up to pre-pandemic levels, two sectors that are driving job growth are healthcare and state and local government, experts said.
“Healthcare in the US has always been under-supplied in terms of labour so a strong growth in that sector is a good thing,” said Bernard Yaros, lead US economist at Oxford Economics. “Our hospitals and health clinics should be fully staffed, especially given an ageing population.”
Hiring for government jobs is still focused on filling jobs that were lost during the pandemic, said Yaros. That sector was a late starter because of the government’s inability to match private sector salaries in order to attract talent, he said. But now that hiring is slowing down in the private sector, jobs in the state sector have seen solid growth, he added.
A lot of the hiring is also being driven by a rebound in immigration since 2023 – both legal and undocumented – that has allowed the economy to continue adding more than 200,000 jobs a month, said Yaros.
“When there’s an increase in labour supply through immigration, it allows for strong growth. But that doesn’t lead to inflation because you have more people looking for work so employers don’t have to raise wages [as much] to attract workers”, Yaros said.
However, hiring in most other sectors remains volatile and mixed, he added.
‘Starting to see some disruption’
“Underneath the shiny headlines, we are starting to see some disruption,” said North.
On Tuesday, the Job Openings and Labor Turnover Survey, or JOLTS report, from the US Department of Labor showed there were 1.36 vacancies for every unemployed person in February, down from 1.43 in January. The decline indicates a rise in unemployment.
According to the data, layoffs reached 1.7 million in February, up from 1.6 million in January. Job openings are down 11 percent year-on-year and job quits – the number of workers resigning from their jobs, likely for better opportunities, said North – have returned to pre-COVID levels, indicating that wage increases will not be as fast-paced or high as they have been.
Unemployment numbers, while still at historic lows, are slowly starting to creep up, hitting 3.9 percent last month, up from 3.7 percent for each of the three months prior.
While the unemployment rate has been below 4 percent for just over two years in a row – the longest such stretch since the late 1960s – the mood is starting to change. In a March consumer confidence survey by The Conference Board, consumers said that jobs are harder to get and that they expect their incomes to decrease over the next six months.
The question now is if, or when, unemployment numbers will break through 4 percent.
“If it goes up to 4.1 percent next month, everyone will start talking about the Sahm rule,” said North, referring to former Federal Reserve economist Claudia Sahm, who invented a measure that examines how fast the unemployment rate is rising to determine if it is an indication of a recession.
While most economists agree that the chances of the US economy slipping into a recession have receded, a rise in the unemployment rate will slow down economic growth.
All of this feeds into decisions that the Fed will have to take on whether to cut interest rates, and how quickly. The benchmark overnight interest rate is in the 5.25 percent to 5.5 percent range, where it has been since July to curb a 40-year high inflation spike. While inflation has come down since then and is hovering around 3.2 percent as of the end of February, the latest data available, that’s still higher than the Fed target of 2 percent.
In such a scenario, a robust job market – and a healthy spending ability alongside – will have the Fed looking for signs of a rise in inflation, delaying interest cuts.
But a slowdown in hiring – and a rise in unemployment, ultimately – could bring the prospect of interest rate cuts. The data on Friday will offer some clues.
Keerthi Subramanian, a shop clerk in South London, earns 10.42 pounds ($13.15) an hour. From Monday that will go up by 1.02 pounds ($1.29) to 11.44 pounds ($14.44) as a new United Kingdom minimum wage kicks in. That is not much help, she says.
“At just over 10 pounds, I wasn’t earning enough. Everything from energy to food prices and rent have gone up in recent years,” Subramanian told Al Jazeera.
While the new legal minimum wage, also known as the National Living Wage (NLW), represents a 9.8 percent increase from previous levels – the highest single boost since 2001 – it is still insufficient for Subramanian. “All my charges have increased since COVID,” she said.
The boost to the NLW, worth 1,800 pounds ($2,271) a year for full-time workers, will benefit 2.7 million people, according to an estimate from the Department for Business and Trade.
The move is part of a 2019 Conservative Party pledge to raise the NLW to two-thirds of average earnings. In 2022, the OECD estimated that the UK’s minimum wage was equivalent to 58 percent of the median wage.
The Conservatives, who have been in power since 2010, rebranded the statutory minimum wage as the NLW in 2015. Initially, it only applied to Britons over the age of 25. Since then, the age limit for those earning the NLW was lowered to 23.
Now, eligibility will be extended to 21-year-olds. Minimum wage rates for younger workers will also increase, with those aged between 18-20 receiving an uplift of 1.11 pounds ($1.40) an hour. For those aged 16-17, pay will rise by 1.12 ($1.41).
The independent Low Pay Commission – a body set up to advise ministers on the minimum wage – produces NLW recommendations every year. This hike represents an acceptance, in full, of last year’s proposal.
Speaking last November, the UK’s Treasury Secretary Jeremy Hunt said that today’s wage boost “will end low-pay in this country,” and that, “the national living wage has helped halve the number of people on low pay since 2010, making sure work always pays.”
The move has been welcomed by trade unions. But many feel the NLW needs to rise by more to keep up with inflation.
Afzal Rahman, a policy officer for the Trade Union Congress told Al Jazeera, “Don’t get me wrong, today’s move was badly needed.”
“But we can’t lose sight of the bigger picture. We’re calling for a minimum wage of 15 pounds ($18.93) as soon as possible,” he said, stressing that average pay packets have flatlined in real terms over the past 15 years by failing to keep up with consumer prices.
Central bank considerations
Last year, real wage growth was high by historical standards. Adjusted for inflation, British workers experienced a 1.4 percent rise in their annual pay packets. But this was largely due to falling inflation. Consumer prices fell from a peak of 11.1 percent in October 2022 to 3.4 percent this February, owing mainly to declining energy prices. In addition, the Bank of England’s (BoE) monetary tightening campaign has let steam out of the economy.
And while price pressures have eased, inflation remains 1.4 percentage points above the BoE’s target of 2 percent. In turn, the new NLW will keep policymakers on their toes for signs that pay growth could feed a new round of inflation.
“Central bank officials are concerned that raising the NLW could have knock-on effects, as employers seek to compensate staff higher up their pay scales,” said Edward Allenby, a UK analyst at Oxford Economics.
“Still, the latest trends in inflation have been positive. And while the BoE will be monitoring price effects from the new minimum wage, we think that overall inflation will continue to fall,” he said.
Allenby also noted that just 5 percent of the UK’s workforce was paid the NLW in 2023. “Taking everything into account, we expect the BoE to press ahead with lower interest rates this summer despite the higher wage floor,” he said.
Real living wage
Distinct from the NLW is the real living wage. Set by the Living Wage Foundation, a charity, at 12 pounds ($15.14) per hour nationally and 13.15 pounds ($16.59) in London, the real living wage is indexed to living expenses. Employers can choose to pay it on a voluntary basis.
In total, 14,000 employers are committed to paying the real living wage. According to Gail Irvine, a policy manager at the Living Wage Foundation, that means there are 3.7 million people – or 13 percent of the UK’s total workforce – paid below 12 pounds per hour.
“The real living wage is about trying to create a fairer society. In Britain, we’ve got a long way to go,” she said. The UK’s Gini coefficient, which measures wage inequality, tallies at 35, near its 2007 peak, higher than any EU country except Latvia and Lithuania.
A Gini score of zero would represent total equality, where income is shared evenly among all households. The higher the score, the greater the income inequality. For context, the UK’s Gini coefficient was 25.3 in 1979.
Away from headline measures, the Equality Trust, a charity, estimated that the top 10 percent of UK earners saw their share of national income rise by 23 percent from 1980-2020. Over the same period, the UK’s total income allocated to the bottom 50 percent fell by 7 percent.
At the highest end of the income spectrum, chief executive pay for FTSE 100 companies, the largest firms on the London Stock Exchange, was 130 times that of their average employee in 2020.
“Clearly, the benefits of national income growth have disproportionately benefitted high earners in recent decades,” said Irvine. “And that’s a big problem, because as most people’s real wages have stagnated or fallen, house prices have gone up.”
She pointed out that, “incomes have risen slower than rent and mortgages for most people, who have to spend more and more on accommodation. The new NLW is welcome, but the lift is too low relative to wider cost pressures, and especially since COVID.”
Last month, Treasury Secretary Hunt hinted that the UK’s next general election will be held in October. Conservatives are currently trailing the opposition Labour Party by 27 percentage points.
Keerthi, the South London shop assistant, will wait to see how the new minimum wage affects her lifestyle before the elections. “If the Conservatives can’t bring down costs, especially rent, I think they’ll be in trouble.”
The appointment comes a few hours after the resignation of Hafize Gaye Erkan citing a media scandal.
President Recep Tayyip Erdogan has named the central bank’s Deputy Governor Fatih Karahan as its new head following the resignation of the chief, Hafize Gaye Erkan.
The appointment of the former senior economist at the US online retail giant Amazon was announced in the Official Gazette early on Saturday, hours after Erkan said she was stepping down partly due to the need to protect her family amid a media scandal.
Cabinet leaders quickly said the economic programme that had begun cooling inflation expectations after a years-long cost-of-living crisis would carry on under Karahan, who is seen as having played a key role in engineering the monetary tightening.
The first woman to lead the bank, Erkan began raising interest rates when she was appointed in June last year, launching a 180-degree pivot away from years of low rates under Erdogan that had sent inflation soaring and foreign investors fleeing.
Since then, the central bank has hiked its key rate to 45 percent from 8.5 percent. Last week, after another 250-basis-point rise, it said it had tightened enough to achieve disinflation, signalling a halt.
In her statement announcing the resignation, Erkan said “our economic programme has started to bear fruit”, citing rising foreign reserves and expectations that inflation will begin cooling around midyear “as proof of this success”.
“Despite all these positive developments, as is known to the public, a major reputation assassination campaign has recently been organised against me,” she added on X.
“In order to prevent my family and my innocent child, who is not even one and a half years old, from being further affected by this, I have asked our President to pardon me from my duty.”
Last month, the opposition newspaper Sozcu published an article about a central bank employee who said she was wrongfully dismissed from the bank by Erkan’s father.
In response at the time, Erkan said an “unfounded” news story targeting her, her family and the bank was “unacceptable” and said she would exercise her legal rights against those responsible.
Erdogan later decried efforts to spread “rumours” meant to undermine economic progress, in an apparent endorsement of Erkan, the bank’s fifth governor in as many years.
Finance Minister Mehmet Simsek said Erkan’s resignation was her personal decision and the economic programme would continue uninterrupted.
Karahan has a doctorate in economics from the University of Pennsylvania and was also a former Federal Reserve Bank of New York economist.
Simsek said Erdogan continues to back the economic team and programme, a sentiment echoed in a separate statement by Turkish Vice President Cevdet Yilmaz.
Inflation neared 65 percent last month and is expected to begin dipping around June, spelling some relief for Turks after years in which rent and other basic needs became unaffordable for many.
Foreign investors, including world heavyweights Pimco and Vanguard, began buying Turkish assets late last year in a strong signal of confidence in Erkan and Simsek’s programme.
Carlin Putman of Houston, Texas worked at AIG for more than two decades. Earlier this year, she lost her job. She was devastated.
But the writing was on the wall for months as the company tried to cut costs.
“No matter how much work we had, it was working off of bare bones,” Putman told Al Jazeera English.
Late last year, the insurance giant announced it would lay off hundreds of employees, including Putman.
“When you are reporting to the board, the less headcount you can show that looks better for them,” Putman said.
In 2022, AIG’s Peter Zaffino was the highest-paid CEO in the entire property and casualty insurance sector. He made more than $75m last year — most of which came from stock grants.
According to data compiled by research firm Equilar, that makes Zaffino the third-highest-paid CEO by revenue in all of corporate America.
AIG has not made any public commitment to its top bosses taking any kind of pay cut amid the layoffs. AIG did not respond to Al Jazeera’s request for comment.
AIG has yet to issue its proxy statement — the document a company releases as it solicits shareholder votes in advance of an annual shareholder meeting and which includes executive compensation for the year. AIG’s most recent was in March. Like most publicly traded companies, it will issue the next one in the first half of 2024.
Other companies did respond to Al Jazeera’s inquiries but said executive compensation has yet to be disclosed. T-Mobile for example said it will release the specifics of CEO Mike Sievert’s compensation package in April as did Pfizer, Morgan Stanley, Ford, GoDaddy and many others.
While corporate America was swift about layoffs, the consensus on executive compensation is to be determined, indicating they could rise. That sends a mixed message about the state of the economy heading into the 2024 presidential election.
High layoffs amid record job growth
Layoffs in tech and other sectors have come despite record job growth [File: Mark Lennihan/Reuters]
In January, Salesforce laid off approximately 10 percent of its workforce. CEO Marc Benioff blamed economic conditions.
The layoffs came despite record job growth in the United States. In 2022, the US economy added 4.5 million jobs — the second-highest in 40 years. Excluding this month, data for which is not yet available, the economy added more than 2.5 million jobs in 2023.
In October, The White House touted inflation slowed by 60 percent since its peak in June 2022.
Concurrently, Salesforce reported $8.2bn in revenue in the first quarter.
“CEOs often get rewarded for layoffs because Wall Street sees it as a sign that the chief executive is taking the tough action to ensure that the company is mean and lean so often they will see a bump in their share price after a layoff,” Sarah Anderson, director of the Global Economy Project at the Institute For Policy Studies, told Al Jazeera.
“In that kind of context, there is no way that shareholders are going to be calling for the CEO’s head or even reducing their bonuses because shareholders are happy when the stock price goes up,” she added.
In a letter to staffers, Benioff said in part “we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”
Yet analysts like Wedbush’s Dan Ives called Salesforce first Q1 results a “masterpiece”. Marc Benioff made the rounds on business news TV to tout its earnings report and was rarely questioned about the massive job cuts even as Benioff’s pay increased 4 percent in 2022, according to Equilar data.
Salesforce has added more than 3,000 jobs since the recent cuts. Benioff did not commit to taking any pay cut. Salesforce did not respond to Al Jazeera’s request for comment.
Despite tailwinds in the US economy over the last two years, according to Layoffs.fyi — a platform that tracks tech industry layoffs — there were more than 260,000 layoffs in the sector.
According to a report from Challenger, Gray and Christmas, there were roughly 20,000 layoffs in the media industry in 2023. The same report found the retail sector cut 78,000 jobs and the healthcare industry cut roughly 57,000.
Salary cuts not always noble
Google CEO Sundar Pichai said he would not take a bonus this year [File: Cathal McNaughton/Reuters]
Despite thousands out of a job this year, seldomly are c-suite executives taking any kind of a pay cut. Al Jazeera evaluated more than 90 companies across multiple industries to see who opted to take a pay cut publicly this past year.
Several companies announced that its CEOs would take pay cuts. In February, Twillio announced its CEO, Jeff Lawson would take an almost 50 percent pay cut. Micron Tech announced that its CEO would take a roughly 20 percent pay cut. Goldman Sachs’s David Solomon announced he would take a pay cut, as well. Alphabet’s Sundar Pichai said he would not take a bonus this year.
How meaningful those are, varies. For instance, Pichai’s announcement only comes after a huge compensation rise for 2022. According to Equilar data, that was a 3,474 percent increase over the year prior.
The most notable cut was at Zoom Communications. Its CEO, Eric Yuan made headlines earlier this year after he announced that he would take a 98 percent pay cut amid layoffs at the video conferencing giant which surged in popularity of the program in everyday life during the COVID-19 pandemic. He took responsibility for overhiring.
For executives taking pay cuts is not always that easy of a thing to do because it can make the company look weak, thus impacting its stock price. Generally publicly traded companies are beholden to their shareholders through a concept called shareholder supremacy and companies can get sued if executives make decisions that are not in the best interest of its shareholders.
But salary cuts are not always as black and white as public relations campaigns make them seem.
Intel for example said it would “temporarily reduce base salaries for our CEO and NEOs 25% and 15%, respectively, with 2023 target bonuses based on the new blended salaries (certain months at prior salary and certain months at reduced salary),” in its most recent proxy statement.
But experts have suggested that that is not always as noble as it seems.
“Where they [CEOs more broadly] are taking cuts is what we need to understand. If they are taking cuts in salary, that’s really the most significant, it’s just the most obvious that people see,” Harikumar Sankaran, professor of finance at New Mexico State University told Al Jazeera.
In the case of Intel, the tech giant cut out cash bonuses for its CEO, Pat Gelsinger. However, the Silicon Valley-based tech giant enhanced the role its stock plays in its executive compensation package.
“A lot of executives with great fanfare announced they were not taking a salary but then when we looked at total compensation, it was just as big as the year before,” Anderson said.
“It is only better than nothing if it’s a meaningful cut in their total compensation. If it is just window dressing in terms of a small cut in base pay, they are going to make out like bandits with their equity-based pay.”
According to the company’s most recent proxy, CEO compensation topped $11.6m, $8.8m of which was in stock awards.
Intel also refocused its compensation commitment to focus more on “at risk” pay. Its proxy statement argued that it will “strengthen our pay-for-performance linkage, provide further alignment with stockholders’ long-term interests, and meet the cost cutting needs of our company given the continued macroeconomic headwinds we face.”
“If companies were to say they would not accept stock grants for the next two years, that would be a significant statement,” Sankaran said.
That said, how CEOs opt to compensate themselves ultimately does not change the increasingly strained financial situation for the hundreds of thousands of American workers who lost their jobs this year.
Sonia Israel and her two daughters are among the more than 100 tenants of a housing complex in Toronto’s Thorncliffe Park neighbourhood who have been on a rent strike since May, withholding payment in an effort to pressure landlords to stop the process of increasing rents massively.
The landlords – Starlight Investments and the Public Sector Pension and Investment Board (PSP) – are seeking what is known as above guideline rent increases (AGI) of cumulatively almost 10 percent – rent hikes that Israel and other tenants say are designed to push them out of their apartments.
That would free the owners to rent out the apartments at more than three times what some of them pay as rentals have shot up manifold in recent years in Toronto’s heated real estate market.
Israel says she loves the view of the Don Valley from her apartment, her home for more than 30 years, especially in the fall, when the leaves change colour. “It’s so sad because I love to live where I am. But with this hiking and whatever is going on with the rent, you know, it put a damper on your living, or your spirit, wondering what’s gonna happen, whether they’re gonna drop the rent increase or keep going with it,” she told Al Jazeera.
A rent increase, should it go through, could mean homelessness for some of the residents. “But they’re doing it because they want the money,” Israel said. “What, they want people to live on the road?”
A petite woman in her 70s, Israel moved to Toronto from Kingston, Jamaica in 1974, leaving behind her three-year-old daughter Tricia-Ann as she joined her husband in search of a better income. A second daughter Nakia was born several years later in 1986, and the family was reunited in 1991 when Tricia-Ann arrived in Toronto, and they all moved into the current two-bedroom apartment on the 10th floor of a concrete tower block at 71 Thorncliffe Park Drive.
The tenants of Thorncliffe Park Drive have focused their demands around three main issues: The landlord is slow to act on a litany of maintenance problems, from leaking pipes, mould and caved-in toilet ceilings to chronic vermin in the form of bedbugs, mice and other pests; there is endless construction and disruptive water shutoffs that affect the 300 apartment units in each of the three towers multiple times a month; and – considered the most critical issue – there have been back-to-back above guideline rent increases (AGIs) from 2022 and 2023 that would see some tenants paying upwards of nearly 10 percent more over two years as opposed to the 1.2 percent in 2022 and 2.5 percent increase in 2023 that were permitted by the government’s guidelines.
Tenants say that since they began organising, maintenance issues have improved somewhat, and they are now mainly focusing on the rent hikes.
Some two-thirds of the approximately 900 households at the Thorncliffe Park complex have taken part in organising efforts since February 2022, whether signing letters, attending rallies, holding meetings in the buildings’ lobbies or visiting the company offices or events frequented by executives of the buildings’ owners – Starlight Investments, one of Canada’s largest landlords, with over 54,000 units under management in the country, and PSP, a crown corporation that invests retirement savings for employees of the federal government.
These issues, if not resolved favourably for the tenants, will push them out of their homes, making way for newer, higher-paying tenants.
Shabby but rich in ‘culture, family’
Sonia Israel and her daughter Tricia-Ann are on rent strike to stop their landlord from implementing massive rent increases that they cannot afford [Neal Rockwell/Al Jazeera]
The Thorncliffe Park neighbourhood is located just south of Eglinton Avenue, wedged within a bend in the Don River. Once a horse racing track in the 1950s and ’60s, it was redeveloped into a dense agglomeration of concrete high-rise apartment towers.
In recent decades, it has become a community of migrants from all over the world, but especially South Asia and the Middle East. The three towers that compose the housing complex at 71, 75 and 79 Thorncliffe Park Drive have a population that is 95 percent visible minority.
The buildings themselves show their age, with cracked concrete, rusting rebar and scattered construction debris – as well as bits of rubbish trapped between balconies and the vast but ineffectual nets that have been hung in an attempt to control the pigeons.
“It may look shabby,” said Tricia-Ann, but it is “rich in terms of culture, family, togetherness and community”.
Men sell produce from cardboard boxes along the street, children play in groups across the grounds, and residents have reclaimed part of the lawn behind one of the towers to plant a sprawling community garden.
“Random people will be going up in the [lift], and they just bless you with a zucchini, with callaloo, with peppers, with beans, whatever it is,” Tricia-Ann said.
Under Ontario law, owners can apply for rent increases above the yearly guideline set out by the province by citing expenses for various capital improvements to their buildings, or for municipal tax increases if these expenses are deemed to be “extraordinary”.
The striking tenants believe that the AGIs are a means for their landlord to pass maintenance costs on to them, as well as raise rent more quickly as a way to force them to move out.
If approved, tenants would be required to pay the rent increases retroactively, dating back to May 2022.
Israel and her two daughters (Israel’s husband passed away a few years ago) say that by going on the rent strike, they are risking eviction. But if they do nothing, PSP/Starlight will keep pushing up the rent and the result will be the same.
“We won’t be able to pay it, and when you’re not able to pay your rent, the result is that you’re on the street,” Tricia-Ann told Al Jazeera.
Things have been difficult for Israel’s family over the past two decades. Sonia Israel lost her job at the Laura Secord Chocolate plant in Scarborough when it closed in 2008, and despite being in her mid-70s, she cannot afford to retire.
“My mom is … at least 10 years past retirement age, but you’re having to pay an exorbitant rent, and you don’t have any big savings, don’t have much of a pension. So you gotta go out there and try and make it happen,” said Tricia-Ann.
Since the closure of the chocolate plant, Israel has been working part-time at the Sistering women’s shelter – a place she had initially gone to for events and services, but which then hired her.
Her first duty was to clean the washrooms. She remembers saying to herself, “You know what, Sonia, don’t think you’re better than that washroom.” After that, she was given work sorting clothing and eventually helping with cooking.
Israel says she earns about $800 in Canadian dollars ($590 US) per month, but that is inconsistent as the shelter’s budget has tightened and everyone has had hours cut back.
Nakia works as a cashier at a Salvation Army, and does maintenance work at a care facility. Tricia-Ann worked at Toys R Us until the work hours were restricted during the COVID-19 pandemic. She has since retrained as a personal support worker for long-term care facilities but has not found any work.
Apart from the rent increases, Israel said there are still maintenance issues. In July, a leaking pipe caused the ceiling to collapse right outside her door. There continues to be a giant hole in the ceiling, which is now home to mice and bugs that find their way into Israel’s apartment, she said.
When the leak first occurred, the landlords’ workers brought a bucket to catch the water, which they left there for three months. Only after much complaining about the increasingly dirty bucket did they recently remove it. “When I say dirty, not even the [rubbish] bin is dirty like that bucket that they leave right in front of my door,” Israel said.
The pandemic was especially difficult for money with all three family members out of work at times, but “the rent still had to be paid”, said Tricia-Ann.
One of the reasons they got through was because of the generosity of a Muslim organisation that many of their neighbours were part of and that cooked meals for tenants and delivered groceries several times a week.
Israel says that they currently pay $1,257.79 Canadian ($930 US) per month for their two-bedroom apartment. After food and rent are paid for, there is “not that much left over. But we survive”, she added.
The proposed rent increases, however, will be too much for them to afford. If they were to be forced out, Starlight/PSP could rent their apartment for more than three times as much. The average cost of a two-bedroom apartment in Toronto is now more than $3,300 ($2,440 US).
When asked about what will happen to them if they have to leave, Israel answers indirectly: “All things are possible with God.”
Tricia-Ann is a little more pointed and added: “Where are you gonna go? We might end up in our shelter,” referring to her mother’s place of work.
The relentless uncertainty of possible eviction wears on her, said Tricia-Ann. “I also know the reality that we are facing that … things could get even more difficult. So obviously, you are living day to day. You know, almost like, not really a state of panic, but … you’re concerned. You’re worried because nobody wants to live on the streets.”
Organising with other tenants has given them hope.
Financialised landlords
The Thorncliffe buildings’ owners Starlight and PSP are what are known as financialised landlords, a relatively new class of landlords that can include private equity funds, asset managers, real estate investment trusts, pension funds, sovereign wealth funds and other large institutional investors.
They are different from traditional landlords both in scale and business model. They operate on national and international scales, often managing billions of dollars in real estate assets. Their profits are not based simply on collecting rents, but actively managing all aspects of a property in order to increase its value as much as possible.
With promises of high returns for investors in short periods of time, these landlords act aggressively to raise rents, including practices promoting high turnover of tenants, changing a neighbourhood’s demographic makeup, Leilani Farha, a former United Nations special rapporteur on adequate housing, told Al Jazeera, describing the business model.
Farha calls this process “demographic engineering”, which these companies term as “repositioning”.
As Starlight describes in an investor document, “[u]nlike many smaller investors and operators in Canada, Starlight has the scale, operational expertise and capital to acquire and actively reposition its properties”.
Starlight is not the only financialised landlord in Canada. A few others include Hazelview Investments, InterRent REIT, CAPREIT, Centurion Property Management and Minto Apartment REIT.
These landlords are moving towards dominating apartment rentals in Canada. They have gone from owning zero units in 1996 to owning between 20 and 30 percent of rental apartments across the country today.
Nemoy Lewis, a professor at Toronto Metropolitan University who studies housing financialisation and its impacts on race and inequality, said that since 1995, 65 percent of all multifamily apartment building purchases in Toronto have been by financialised landlords.
PSP is Starlight’s “longest-standing partner”, dating back to 2007. An access to information request from 2020 shows that at the time PSP had a portfolio of 136 properties with Starlight, 119 of which were located in Canada.
A comparison of that access to information request with Starlight’s Canadian portfolio as listed on its website for the same year showed that PSP owned 40 percent of Starlight’s Canadian buildings, almost exclusively in the region between Toronto and Hamilton, and Vancouver-Victoria, which are the most valuable areas for real estate in Canada.
Al Jazeera sent in fresh access to information requests for the current year, to get a more up-to-date picture of PSP’s holdings with Starlight. PSP returned these documents with this information 100 percent redacted.
Fast-track hearing
In mid-August, Thorncliffe tenants were informed that Starlight had been granted a fast-track hearing for the AGIs following a June 23 ruling by Landlord and Tenant Board (LTB) Vice-Chair Egya Sangmuah. The LTB is an adjudicative tribunal operating in the province of Ontario that provides dispute resolution of landlord and tenant matters.
Instead of a physical hearing, the LTB asked parties to make submissions in writing. Tenants were given a deadline of September 15, and the landlord September 30 for any final comments or reactions.
Tenants’ request for a change to an in-person hearing, because language barriers make written submissions difficult for the largely immigrant population, was denied.
The Thorncliffe tenants say AGIs should not exist at all because they unfairly pass maintenance costs from profitable companies onto the backs of struggling renters. The ruling is expected in the near future.
In their submission to the LTB, the landlord alludes to “harassment” and “defamatory comments” on the part of organisers, but without offering any specifics.
PSP directed Al Jazeera’s questions to Starlight, which declined to provide any additional clarifications about the allegations contained in the LTB submission.
Sameer Benyan, one of the tenant organisers, said that Starlight’s “lack of specifics makes any of their arguments useless”, adding that organisers have taken a respectful, non-violent approach.
The landlord’s submission also paints the movement as being the work of outside agitators, something Benyan said is disrespectful since “it doesn’t regard the tenants at all” who have been organising for nearly two years to keep their homes affordable.
Cole Webber, a housing organiser and community legal worker with Parkdale Community Legal Services, is named as one of the outside “offenders” in the submission. His involvement in the movement, he said, is limited to attending several events.
Webber added that this judgement to speed up the hearing was unprecedented in his experience as both a housing organiser and community legal worker. “I have never seen the LTB grant a landlord’s request to shorten time to the hearing of its AGI application, let alone grant a landlord’s request based on the landlord being under pressure from tenant organising,” he told Al Jazeera.
Sameer Benyan and his parents, who arrived in Toronto in 2016 as refugees from Saudi Arabia, are currently on a rent strike against above guideline rent increases (AGIs) to their rent [Neal Rockwell/Al Jazeera]
The other outside organiser named in the landlord’s LTB filing is Philip Zigman, a Toronto housing advocate and the co-founder of a website that maps renovictions called RenovictionsTO. Zigman confirmed he has been assisting the tenants to organise, but said he is not leading this movement.
Both Starlight and the LTB declined to comment on proceedings that are before the tribunal.
‘An attempt to kill the movement’
Benyan said that he and other tenants were “shocked” that the LTB fast-tracked the AGI application and it feels like “an attempt to kill the movement”.
He added that it was unfair that the landlord could submit a document that he considers to be full of vague, defamatory falsehoods, without involving tenants or giving them a chance to give their version.
“From the beginning, we have been trying to reach PSP members, trying to reach Starlight as well. But each and every time we’ve been faced with people who told us that this is not the place to speak of this, this is not the time to speak of this. And they’re not willing to listen to any of our demands,” he said.
No party with any power has heard out the tenants, and when they are acknowledged at all, as in the case of the fast track application, they are portrayed as hapless victims being led about by two outside “agitators”, he pointed out.
Benyan has lived at Thorncliffe Park since arriving in Canada from Saudi Arabia with his parents in 2016. Originally from Eritrea, his parents arrived in the Gulf state 40 years ago as labourers. Benyan was born there in 1990. Owing to Saudi laws, none of them were granted citizenship, and once his parents retired, they lost their residency status and had no retirement benefits. With turmoil in Eritrea, the family instead came to Canada as refugees and settled in Thorncliffe Park, where they already had family members.
Benyan and his ageing parents joined the rent strike because they felt that without tenants doing something, Starlight/PSP would eventually force them out with successive rent increases.
“When these above guideline increases started, we felt that Starlight basically … wants to replace the older tenants – those who can least afford to live in this neighbourhood – with other tenants who can afford to pay a higher amount per month,” he said.
Benyan, 33, has been supporting his family since the age of 19. Ideally, he says, he would like to have his own apartment, to start his own family, but given the current rental market in Toronto with a two-bedroom available for more than $3,300 ($2,430 US), that does not seem likely.
His parents each receive about $750 ($555 US) a month in government benefits. Benyan’s job as an office administrator, where he earns about $3,000 ($2,208 US) per month before taxes, covers the rest of the living costs for the three of them.
Benyan said he often thinks about what could happen should he lose his job and the idea leaves him feeling “really anxious … the fear is there” on how they would survive.
Evictions
Both Benyan and the Israels, along with the other rent strikers, have received eviction notices for non-payment of rent – and a collective hearing date of December 11 for these notices – but both feel this would be the inevitable outcome of the price increases if they do not act.
Lewis’s research shows that their experiences fit into a larger trend in Toronto and elsewhere. Financialised landlords target minority neighbourhoods, and try to evict as many tenants as possible so they can reposition neighbourhoods, he said.
“Part of the reason you often find underperforming, undervalued properties in racialised and economically disenfranchised communities [is] largely because those communities have been historically disinvested, not just by the private sector, but by the state itself,” he said.
Lewis’s research also shows that in terms of evictions, Starlight stands out.
Between 2018 and 2021, which covers the time of the COVID pandemic, the single largest number of eviction notices in the city came from the Toronto Community Housing Corporation (TCHC) at 5,132. Starlight came in a close second, issuing 4,622 eviction notices in that period. TCHC has approximately 60,000 units, whereas Starlight has around 18,000 units in Toronto.
Evictions are highly overrepresented in racialised communities, Lewis said. For instance, during the period mentioned above, a full five percent of all of Toronto’s evictions took place in the 0.34 percent of the city that had Black populations of more than 70 percent. Ten percent of evictions took place in areas with a greater than 50 percent Black population.
Once again, Starlight stands out. Twenty-three percent of the company’s evictions took place in areas that are more than 50 percent Black, even though these neighbourhoods make up only one percent of the city as a whole.
During this period, a building owned by Starlight at 2737-2757 Kipling Avenue in Etobicoke, where 71.5 percent of the population is Black, saw tenants served with 758 eviction applications, Lewis said. The complex has 759 units in total.
PSP has a history of investing with companies that disproportionately evict racialised populations. In 2021, PSP was revealed to be part of a $950m ($700m US) joint venture with the United States private equity real estate firm Premium Partners, which was exposed for evicting Black residents in some regions in the US at seven times the rate of white residents during the pandemic.
PSP directed Al Jazeera to Starlight for any comments, but the latter has not responded.
Some PSP beneficiaries object
Housing experts say financialised landlords target minority neighbourhoods, and try to evict as many tenants as possible [Neal Rockwell/Al Jazeera]
The striking tenants have found support from at least some of the beneficiaries of PSP’s investments.
The Public Service Alliance of Canada (PSAC), the union that represents about 70 percent of the federal employees who benefit from PSP’s investing, is often critical of their pension fund’s investment decisions for being unethical.
The law that brought PSP into existence prevents unions and their members from having a say in how the pension fund invests money on their behalf. Instead, PSAC often engages in political campaigns against PSP as this is the only lever of influence it has.
On its website, the Ontario PSAC branch has posted a letter of solidarity with Thorncliffe rent strikers demanding that PSP and Starlight withdraw the AGIs, stating, “Starlight has applied for more above guideline rent increases than any other landlord in Toronto and was one of the top evictors during the pandemic.”
At least one of the rent strikers of Thorncliffe Park who has been served an eviction notice is a PSAC member.
When asked about the relationship between one of Canada’s largest public pension funds and Canada’s largest landlord and the role they played in the gentrification of her neighbourhood, Israel summed it up with: “The government don’t care … [The two entities] work hand in hand.”
Nonfarm payrolls increased by 236,000 last month, according to the Labor Department’s closely-watched March jobs report released Friday.
The figure was roughly in line with expectations. Prior to the March jobs report’s release, economists polled by Dow Jones had forecast jobs growth of 238,000.
The US unemployment rate sank slightly to just 3.5%, down from 3.6% in February.
“Employment continued to trend up in leisure and hospitality, government, professional and business services, and health care,” the Bureau of Labor Statistics said in a release.
Average hourly wages ticked 0.3% higher, slightly more than economists expected. Wages have increased by just 4.2% over the last 12 months – the slowest clip since mid-2021.
Investors anxiously awaited the latest hiring data given lingering uncertainty about the Fed’s policy path. Fed Chair Jerome Powell has often cited tightness in the jobs market as the central bank enacted a series of rate hikes over the last year.
Hiring in March matched expectations.AP
“The labor market is cooling down though not as quickly as the Fed would like it to,” Derek Tang, an economist at LH Meyer/Monetary Policy Analytics in Washington, told Bloomberg. “This keeps a May hike in play, though just barely.”
Wages increased by 0.3% in March.AP
The market is pricing in a 69% probability that the Fed will implement another quarter percentage point interest rate hike at its next policy meeting on May 2-3, according to CME Group’s FedWatch tool. Investors see just a 31% chance that the Fed will pause its tightening campaign.
The Fed implemented a quarter-point hike last month, signaling its resolve to tame inflation despite weakness in the US banking sector. Inflation is still running abnormally high – with prices jumping 6% year-over-year in February, according to last month’s Consumer Price Index.
Powell and other experts have suggested that bank crisis could lead to tightened credit conditions that would further cool prices.
The US unemployment rate is just 3.5%.AP
US stock futures were mixed as the market digested the March jobs report. Dow Jones Industrial Average futures fell about 55 points, while Nasdaq and S&P 500 futures were flat.
Hiring stayed resilient even as major US companies slashed jobs and enacted cost-cutting measures amid signs of a slowing economy.
Disney began its first of three planned rounds of layoffs in late March as part of plans to cut about 7,000 jobs and $5.5 billion in expenses.
New Yorkers are giving Gov. Kathy Hochul even lower marks when it comes to confronting the rising cost of living in the Empire State than the below water rating they gave her on fighting crime, a new poll reveals.
“Crime and cost of living were voters’ top two priorities for Albany back in December heading into this session, and they remain the two issues voters want Hochul and the Legislature to prioritize,” said pollster Steven Greenberg of the Siena College poll released Monday.
“Crime is the top priority for Republicans, independents, downstate suburbanites, and upstaters, while for Democrats and New York City voters, cost of living edges out crime for the single top priority,” he added.
The poll, conducted Feb. 19-23, which had a margin of error of plus or minus 5%, highlights how Hochul continues to struggle on some key issues as she pushes a range of controversial budget proposals – which include an effective ban on gas stoves in new buildings opposed by voters 53% to 29% – ahead of an April 1 budget deadline.
Voters overwhelmingly believe crime is at least somewhat serious of a problem in the Empire State, with 60% of voters overall saying the situation is “very serious” and another 32% saying “somewhat serious.”
A new poll shows voters have mixed attitudes on the budget proposals unveiled by Gov. Kathy Hochul at the beginning of February ahead of the April 1 budget deadline.AP
A 49% plurality of respondents disapprove of Hochul’s handling of crime – New York City kicked off 2023 with an 18% spike in serious assaults – compared to 43% who approve.
Siena found big differences between the opinions of suburbanites and upstaters on crime and affordability compared to their relatively left-leaning counterparts in New York City.
A 55% majority of people within New York City approve of her handling of crime compared to 59% upstate and 51% in the suburbs.
Registered Republicans gave Hochul her worst marks on crime with 75% of them disapproving, alongside 66% of self-identified conservatives and 63% of independents.
A whopping 64% of Latinos disapprove of her record on public safety compared to 47% of Black voters and 41% of white voters.
Young people between the ages of 18 and 34 were the only age group to have a majority (53%) approving of her approach to rising crime while at least 50% of every other age group disapproved.
Crime was the top issue for 36% of voters though the cost of living and affordable housing were close behind at 27% and 13% with public health, the environmental and racial justice trailed at 8%, 7%, and 6% in the survey of 744 registered voters.
The Siena Poll showed voters disapproving 53% to 29% Hochul’s budget proposal to effectively ban gas stoves in new buildings.Getty Images Hochul got relatively positive marks from voters on some issues, but not her budget push to ban new gas hook-ups in new buildings beginning in 2025 and with larger buildings three years later. SIENA RESEARCH INSTITUTE
The numbers for Hochul were even worse when it came to making New York more affordable.
A 54% majority disapprove of the job Hochul is doing with making New York more affordable compared to 39% who approve.
The numbers are much worse in the suburbs and upstate, with 63% and 64% of people from the two groups respectively disapproving of her response to sky-high prices compared to just 24% and 32% who approve.
The new poll finds nearly unanimity among voters that crime is at least “somewhat serious” of a problem.Matthew McDermott
But the situation is reversed within the five boroughs where 56% of respondents approve of her her affordability efforts compared to 37% who disapprove.
The differences in opinion are much less pronounced by ethnicity, gender, or income level while 75% of Republicans disapprove compared to 58% of independents and 41% of Democrats.
“There is a regional aspect to it, but I think largely the regional aspect to this is the partisan aspect,” Greenberg told the Post about the differences in opinion between New York City, upstate and suburban counties that include Nassau, Suffolk, Westchester, Rockland, Orange, and Putnam.
Hochul got better marks from voters on other fronts though her favorability rating slipped from 48% to 46% over the last month, with her disapproval rating increasing from 42% to 43%.
Two-thirds of registered voters say liar Rep. George Santos should resign – including 58% of Republcians.AP Hochul’s approval rating remained relatively the same. SIENA RESEARCH INSTITUTE
Her disapproval rating, however, jumped to 40% from 26% a month ago.
Voters approve of her efforts “to encourage businesses to locate in New York” by 51% to 37%.
A slight plurality (45%) gave the thumbs up to her push to increase “the availability of affordable housing in New York, with 41% giving a thumbs down.
Just 33% of voters oppose her proposal to lower the legal blood alcohol limit from .08% to .05%.
A 57% majority supports a proposed ban on flavored tobacco products compared to 35% who oppose the idea.
Her proposal to peg the state minimum wage to the rate of inflation is uniting people across the political spectrum, with 59% of Republicans supporting the idea alongside 82% of Democrats and 70% of voters overall.
Just 16% of respondents say Santos should not resign following revelations about the falsehoods he told voters about his professional and personal background while 66% of voters overall say he should step down.
“The ‘good’ news for Santos is that even in these hyper partisan times, he’s found a way to get Democrats, Republicans and independents to agree about a political figure. The bad news for Santos is that the political figure they agree on is him, and they overwhelmingly view him unfavorably,” Greenberg said. “It’s not just that 72% of Democrats want him to resign, so do 63% of independents and 58% of Republicans.”
WASHINGTON — President Biden celebrated a slight decline in the rate of annual inflation to 7.1% Tuesday — while warning a return to normal rates of around 2% was “going to take time” and that there may be “setbacks along the way.”
Biden spoke after new data showed annual price increases cooled in November, continuing a gradual deceleration from a peak of 9.1% in June, while still remaining much higher than at any point since the early 1980s.
“In a world where inflation is rising at double digits in many major economies around the world, inflation is coming down in America,” Biden said at the White House, referring primarily to European inflation, which slightly outpaces US rates due to energy disruption from Russia’s invasion of Ukraine.
“Make no mistake, prices are still too high and we have a lot more work to do,” the president said. “But things are getting better and headed in the right direction.”
“Most Americans can see the progress driving down the street and finding relief at the pump as gas prices fall,” he went on. “Today’s report contains another piece of good news: food inflation slowed last month, providing much-needed relief for millions of families at the grocery store.”
President Biden celebrated a slight decline in the rate of annual inflation to 7.1% on Dec. 13.AP
So-called “core inflation,” referring to all items except food and energy, increased by 6% over November of 2021.
In response to a reporter’s shouted question about when prices would “get back to normal,” Biden suggested it might happen toward the end of 2023.
“I hope by the end of next year we’re much closer,” he said. “But I can’t make that prediction. I just — I’m convinced they’re not going to go up. I’m convinced they’re going to continue to go down.”
The Federal Reserve’s target for annual inflation is 2% and for the past two decades, it has been roughly that. The central bank has dramatically increased interest rates in an attempt to lower inflation, heightening concern about a possible recession next year.
The White House has largely blamed inflation on COVID-19, alleged corporate price-gouging, and Russia’s invasion of Ukraine — while Biden’s critics point to massive increases in government spending since he took office in January 2021.
“I want to be clear: it’s going to take time to get inflation back to normal levels as we make the transition to a more stable and steady growth,” Biden said. “But we could see setbacks along the way as well. We shouldn’t take anything for granted. But what is clear is that my economic plan is working and we’re just getting started.”
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He added: “I know it’s been a rough few years for hardworking Americans and for small businesses as well, and that for a lot of folks things are still pretty rough. But there are bright spots all across America where we’re beginning to see the impact of our economic strategy and we’re just getting started.”
Biden has signed some of the largest spending bills in US history, arguing that they were needed to keep the economy afloat and ultimately could reduce some consumer costs, including by improving transportation and energy efficiency.
Although some of the spending bills contained new revenue to offset spending, skeptics accused bill authors of budget gimmicks to paint a rosier economic picture by spreading spending out over fewer years than those offsets.
Republicans will retake the House next month and are vowing to halt ambitious Biden proposals. Rep. Elise Stefanik (R-NY), chairwoman of the House Republican Conference, told The Post in a recent interview that the GOP would seek to “claw back this reckless spending” to reduce inflation.
“The first way we start to strengthen the economy is to rein in inflation by stopping the reckless spending bills,” Stefanik said. “We absolutely will use that power … to not only claw back this reckless spending but also put a stop to Joe Biden’s spending proposals … and that will begin to lower the rate of inflation.”
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