FGA Research Shows Expanded Welfare Benefits and Labor Shortages Are Causing “Bidenflation”

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Naples, FL—A recent Foundation for Government Accountability (FGA) report reveals that inflation caused by excessive government spending and ongoing labor shortages is hitting low- and middle-income Americans the hardest, with the inflation rate reaching 7.1 percent in 2021—a 40-year high.

FGA researchers found that in 2021 alone, annual gas prices increased by 49.6 percent, food prices increased by 12.5 percent, and used vehicle prices increased by 37.3 percent, leaving many families worried about meeting monthly expenses.

The report reveals that inflation is being driven by expanded welfare benefits that are contributing to labor shortages nationwide. In 2021, producer prices alone increased by 20 percent. FGA attributes this to employers paying more for wages, insurance benefits, retirement benefits, unemployment taxes, and more to incentivize Americans to return to work rather than rely on government benefits.

“The Biden administration continues to make excuses for the inflation crisis, but for most Americans, this reality is greatly impacting their family budgets,” said Hayden Dublois, Deputy Research Director at FGA. “Policymakers need to stop the welfare train and pass reforms that encourage able-bodied Americans to return to work in order to halt rising prices and grow the economy.”

Policies that states have at their disposal to bolster the workforce include indexing unemployment benefits to economic conditions, expanding unemployment work search requirements, and opting out of federal Medicaid restrictions that are keeping more Americans on welfare. States must fill the void in federal leadership by acting now to rejuvenate the labor force and end the cycle of runaway inflation.

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The Foundation for Government Accountability (FGA) is a non-profit, multi-state think tank that promotes public policy solutions to create opportunities for every American to experience the American Dream. To learn more, visit TheFGA.org.