Top Biden economic official discusses inflation during visit to Milwaukee

 

MILWAUKEE (CBS 58) -- On the same day a new report concluded economic growth has been better than previously estimated, a top economic official from the Biden administration visited Milwaukee.

Deputy Commerce Secretary Don Graves took part in a roundtable discussion at City Hall Wednesday with Gov. Tony Evers, Milwaukee Mayor Cavalier Johnson, Common Council President Jose Perez and others.

The focus of the discussion was on the Puerto Rican community, and in an interview with CBS 58 after the event, Graves acknowledged the Biden administration had work to do in order to convince voters, particularly people of color and those in the working class, they were benefitting from the economic growth.

The U.S. Department of Commerce's report Wednesday found Gross Domestic Product (GDP), a widely-accepted measurement of overall economic health, had grown by 5.2% in the third quarter. A previous estimate stated the economy had grown by 4.9%. 

At the same time, the rate of inflation remains above 3%, a vast improvement over last year when it spiked at 9%, but still above historic averages.

Graves noted inflation was heading in the right direction but added he understood voters' frustrations with costs that remain high. After all, the rate of inflation means prices are still going up; it's just a question of how much and whether wages are keeping up.

"We know costs are higher than they should be," Graves said. "The good thing is since the president took office, wages have gone up significantly."

A small business owner's perspective

Puerto Rican cuisine is just part of the menu at La Caribeña on Milwaukee's south side. Having opened in December 2011, owner Edwin Ordoñez, a native of Colombia, said surviving the COVID-19 pandemic and staying in business for 12 years is a proud achievement.

"I learned a lot," Ordoñez said. "I learned a lot."

Ordoñez listed inflation and labor costs as the biggest challenges he's facing. To survive the pandemic, he said that meant going into debt in order to stay fully staffed.

"Sometimes you have to take big Ls, you know? You have to lose a lot of money in order just to keep the employees," he said. "You have to come up with money somewhere, like credit, loans, even your personal savings just to pay them in order to keep their jobs."

Coming out of the pandemic, Ordoñez said he believed the best way the federal government could help was by going after suppliers engaging in price gouging. He recalled prices for business essentials like rice sometimes skyrocketing overnight. 

"I'm suspecting that some big industry took advantage of what was going on, doubled the price just from one day to the other," Ordoñez said.

Ordoñez said he also wanted to see Washington go after credit card companies for charging fees on transactions he found to be unreasonable. Graves said the Biden administration was listening.

"That's why the president is so focused on things like junk fees," Graves said. "To bring down those costs that companies are just using [for] what they say is inflation, but the reality is they're pocketing those profits."

Swing state voters skeptical

Graves' visit came shortly after a New York Times/Sienna College poll focused on swing state voters who backed President Biden in the 2020 election.

Targeting those voters in Arizona, Georgia, Michigan, Nevada, Pennsylvania and Wisconsin, the poll found Biden voters who make less than $50,000 a year and people of color were especially skeptical about the current economic state.

According to the poll, 70% of workers earning less than $50,000 a year rated the economy as either poor or fair while 30% described the economy as excellent or good.

Among both Black and Hispanic voters, 75% assessed the economy as being in either fair or poor condition. The results illustrate the challenge for the Biden administration, as well as Biden's re-election campaign going into next year: translating data projecting an economic bounce back into a message that connects with voters frustrated by higher prices and borrowing rates.

"[Inflation is] already down significantly from where it was just two years ago," Graves said. "We'll see that continue over the course of the coming months and years."

Biden on Monday announced the creation of a council aimed at improving supply and logistics chains. Biden added his administration would place a greater emphasis on cracking down on companies that needlessly jacked up prices and used inflation as a scapegoat.

Ordoñez said he hoped to see action and eventually change. For now, in his own corner of the economy, Ordoñez said he would maintain a positive outlook.

"I got faith that in 2024, it's just gonna be booming," he said. "I got big faith that it's gonna be way better than it was in 2023 and 2022."