In conjunction with the CPI release, the BLS computes Real Hourly Earnings.
In real (inflation-adjusted) terms, the average worker makes $10.75 per hour. That’s a penny more per hour than in April. The average worker makes exactly what he did a year ago.
Production and supervisory worker fared even worse.
Production and Supervisory Workers
All Employees Month-to-Month Progress
Production and Supervisory Month-to-Month Progress
From May 2017 to May 2018, real average hourly earnings decreased 0.1 percent, seasonally adjusted.
The decrease in real average hourly earnings combined with a 0.6-percent increase in the average workweek resulted in a 0.5-percent increase in real average weekly earnings over this period.
Hooray!
Production employees are making less per hour but make it up by working longer.
CPI Distortions
Bear in mind these are actual BLS calculations, accurate only if you believe the CPI tells the real story.
The only group I can come up with that may reasonably match CPI estimates are retired workers who own their own home and are covered by Medicare.
Anyone in school, buying their own private health insurance, or looking to buy a home will tell you the BLS CPI stats are bogus.
Bogus Averages
Note that “averages” tell a poor story. Most of the wage gains go to the top employees. The median worker is making less per month and less than a year ago.
Add it all up and the median wage earner is getting clobbered.
For a look at the latest CPI numbers, pleaser see Year-Over-Year CPI Up Most in 6 Years, Bond Market Reacts with Big Yawn.
Mike “Mish” Shedlock
If there was high demand for skilled labor, it would show up in aggregate wage increases. The only plausible way for wage growth to be 0 is if there’s almost no demand across the board. Either that or some are having wage shrinkage which offsets wage growth for others.
Wage growth is happening in certain job sectors, especially the high-skilled jobs or finance. But for the vast, vast majority of workers already employed, wage increases are tied to inflation. If you are lucky and receive a yearly merit wage increase, it’s probably not more than inflation, maybe 2-3%. I remember when I started working in the 80’s and received yearly merit increases of 8-10%.
I thought unemployment was at decade lows. How is it possible for wages to be stagnant when there’s record demand for workers?
But somehow everyone in their 20s can afford the latest iPhone. Not any iPhone but the latest
Housing is a killer and indeed is up far more than the CPI purports
Rents have skyrocketed over the past 6 years as well. $2000 + a month is new normal well out into the suburbs of the greater NYC or Boston areas where you looking at a 60-90 minute commute each way to and from work
“Anyone in school, buying their own private health insurance, or looking to buy a home will tell you the BLS CPI stats are bogus.”
You mean, anyone stuck paying for something the government regulates unusually intensively, in order to make it more “affordable?’
Sounds about par for the course for progressivism……