Fact-checking 7 statistical claims from Biden's (quite factual) economic speech
Posted January 26, 2021 9:31 a.m. EST
CNN — President Joe Biden recited a flurry of figures in a Friday speech in which he urged Congress to pass the $1.9 trillion pandemic relief package he calls the American Rescue Plan.
We fact-checked many of the statistical claims Biden made in the speech -- and found Biden was highly factual, though there are some nuances worth noting. Here's an assessment of seven of the claims we looked into:
Job losses in education
Biden noted that his plan includes funding for local governments to keep critical public employees on the job; his predecessor Donald Trump and other Republicans resisted this kind of direct aid to state and local governments. Biden said: "Over the last year, more than 600,000 educators have lost their jobs in the cities and towns."
Facts First: This figure is roughly accurate, but it relies on a broad definition of "educators."
Biden's claim is based on official federal data about people employed in "local government education." That data does indeed show a loss of more than 600,000 jobs -- 681,400 jobs, specifically -- between January 2020 and December 2020. (The data for the month of December is preliminary and might be adjusted later.) It's worth noting, though, that these numbers count everyone who is employed by local educational institutions -- including such people as cafeteria workers, custodial workers, and students who are on the payroll for various reasons -- so "educators" shouldn't be interpreted to mean teachers specifically.
Biden said, "All told, the American Rescue Plan would lift 12 million Americans out of poverty and cut child poverty in half. That's 5 million children lifted out of poverty. Our plan would reduce poverty in the Black community by one third and reduce poverty in the Hispanic community by almost 40 percent."
Facts First: These figures are, obviously, predictions rather than guarantees; Biden got them from a "preliminary analysis" by scholars at Columbia University's Center on Poverty and Social Policy, which looked at the impact of certain components of his plan. Like other economic modeling, this analysis relied on various assumptions about the future that may not come true. But other experts say the Columbia figures Biden cited make sense.
Among other assumptions, the scholars assumed an average of 6% unemployment for 2021. That's plausible -- the December rate was 6.7%; the Federal Reserve expects a decline to 5.0% in 2021. "These estimates are totally reasonable," Michael Strain, director of economic policy studies at the conservative American Enterprise Institute think tank, said of the numbers Biden cited. Strain added: "The Biden plan has several provisions that would substantially increase the incomes of low-income households. You would expect this to have a significant impact on child poverty rates, and the estimates produced in this report are very reasonable."
Diane Whitmore Schanzenbach, director of the Institute for Policy Research at Northwestern University, said "their assumptions seem reasonable and they are known for doing careful analysis."
You can click here for a summary of what is in Biden's plan. It includes additional direct payments, increased unemployment benefits, billions in rental assistance and food assistance, billions for child care, an increase to the child tax credit, and an increase in the federal minimum wage from $7.25 per hour to $15 per hour.
Biden touted an executive order that seeks to ensure people can still receive unemployment benefits if they turn down a job offer because they think the job will put them or their families at risk from Covid-19. He said, "Right now, approximately 40 percent of households in America have at least one member with a pre-existing condition."
Facts First: This figure is approximately accurate, according to research data. "In fact, that's probably an understatement," said Cynthia Cox, vice president at the Kaiser Family Foundation, which studies health care issues.
A Gallup poll in November found that 48% of respondents said they or a family member living with them had a pre-existing condition, Gallup told CNN. The Kaiser Family Foundation estimated in 2019 that 45% of non-elderly families had at least one non-elderly adult member with a pre-existing condition. If you include people age 65 and older in the analysis, Cox noted, the figure would be even higher.
Speaking about the US coronavirus crisis, Biden said, "We're 400,000 dead, expected to reach well over 600,000."
Facts First: Different experts have different expectations, but Biden's "well over 600,000" figure is, unfortunately, very plausible.
There were more than 413,000 US coronavirus deaths as of the day Biden spoke, according to Johns Hopkins University data. A model from the University of Washington's Institute for Health Metrics and Evaluation now projects a total of 569,000 deaths by May 1, and there will almost certainly be additional deaths after that date. Marc Lipsitch, epidemiology professor at the Harvard T.H. Chan School of Public Health, said Biden's statement is "a reasonable projection."
The minimum wage and poverty
Touting his proposal to raise the federal minimum wage to $15 per hour from the current $7.25 per hour, Biden said, "No one in America should work 40 hours a week making below the poverty line. Fifteen dollars gets people above the poverty line."
Facts First: It's true that some people who are currently below the poverty line would move above the poverty line if the federal minimum wage were raised to $15 per hour: the Congressional Budget Office estimated in 2019 that a $15 minimum wage "would move, on net, roughly 1.3 million people out of poverty." Others offer different estimates; Ben Zipperer, an economist at the Economic Policy Institute, a progressive think tank, said, "We believe the CBO estimate to be too pessimistic." He said it is "more plausible" that between 1.9 million and 4.0 million people would be lifted out of poverty.
The CBO said families below the poverty line under current law would see a 5.2% average increase in income because of the increased minimum wage, while families above the poverty line under current law would see an average 0.1% reduction in income (in part because of a reduction in business income). The CBO added: "In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO's median estimate."
Though the overall economic impact of a federal minimum wage increase is complicated to assess, it's easy to understand the basics of how it would improve the outlook for some workers. The weighted average 2019 poverty threshold for a family of four was $26,172. At the current $7.25 per hour federal minimum wage, someone would be more than $11,000 below that poverty threshold even if they worked 40 hours a week for 52 weeks a year. Making $15 per hour, that person would exceed the threshold if they worked 44 weeks a year.
"So as a labor standard -- yes, a $15 minimum wage could be accurately described as getting most families over the poverty line if they are working full-time year round," said Jeannette Wicks-Lim, associate research professor at the University of Massachusetts Amherst.
Wicks-Lim noted that there are nuances here. Some people have part-time work hours, part-year employment or bigger families; the cost of living varies widely by location, but the official poverty line doesn't adjust for this fact; exceeding the poverty line may mean only someone has "escaped severe deprivation," she said, not that "they are able to sustain a decent living standard."
Biden said, "We need to tackle the growing hunger crisis in America. One in seven households in America -- one in seven -- more than one in five Black and Latino households in America report they do not have enough food to eat."
Facts First: These figures were correct in December, according to data from the latest Census Bureau survey on Americans' food situations (which the bureau cautions is an "experimental" survey).
Between December 9 and December 21, 14% of adults, 24% of Black adults and 21% of Latino adults reported that they often or sometimes did not have enough to eat in the last seven days.
Biden's plan includes a variety of measures intended to address hunger, including an extension, through September, of a 15% increase in food stamp benefits that Trump signed into law in December. The extension is currently scheduled to expire at the end of June.
Biden said, "Approximately 14 million Americans -- 14 million -- have fallen behind on rent, and many risk eviction."
Facts First: Fourteen million is a plausible figure that extrapolates a little from Census Bureau findings for December.
The bureau's experimental survey for December 9 to December 21 found that 10.1 million renters lived in households that were not caught up on rent. The Center on Budget and Policy Priorities, a progressive think tank, came up with the 14 million figure by adjusting the Census Bureau data to account for the fact that many renters did not respond to the survey.
CNN reported in December that investment bank and advisory firm Stout had found that more than 14 million American households were at risk of eviction at the time. The Census Bureau survey found that 5.2 million people said it was either very likely or somewhat likely they would have to leave their home due to eviction in the next two months.
Biden's rescue package would provide $25 billion in rental assistance for low- and moderate-income households who have lost jobs during the pandemic (in addition to the $25 billion Trump approved in December). Another $5 billion is directed toward helping struggling households pay utility bills. And an additional $5 billion is for states and localities to assist people at risk of experiencing homelessness.
Separate from the rescue package that must be approved by Congress, Biden took executive action on his first day in office to extend, through the end of March, pandemic moratoriums on many evictions and foreclosures. The moratoriums approved by Trump had been scheduled to expire at the end of January.