For the second consecutive month, the year-over-year average hourly pay has lost to inflation.
Average Hourly Earnings of All Private Workers Minus CPI-U
I created the above chart by taking the year-over-year increase in average hourly pay for all workers and subtracting the year-over year increase in the CPI.
Both seats of numbers are not seasonally adjusted. CPI-U is the official CPI,
Average Hourly Earnings of Production and Supervisory Workers
The BLS has a separate set of stats for production and supervisory workers. Its CPI measure is CPI-W.
I created the above chart by taking the year-over-year increase in average hourly pay for production and supervisory workers then subtracted the year-over year increase in the CPI-W.
Net Losers
Both sets of workers are currently losing money to inflation.
The Great Recession and Covid-19 spikes happened when the bottom rung of workers were laid off in recession, artificially inflating wages if you were working.
Related Articles
- Huge Upward Wage Pressures for Both Skilled and Unskilled Labor
- Where Are the Job Openings and How Much Does One Make Per Hour?
- Year-Over-Year CPI Jumps 5%, That’s the Most Since August 2008
- How the Fed’s Inflation Policies Benefitted the Top 1% In Pictures Part 1
- How the Fed’s Inflation Policies Benefitted the Top 1% In Pictures Part 2
Subscribe!
Like these reports? I hope so, and if you do, please Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
If you have subscribed and do not get email alerts, please check your spam folder.
Mish
It is a shame that we do not have indexes for different kinds of jobs as we do for prices of different goods and have to rely instead on unit value (average wages) for certain subsets of workers.
Deflation is certainly another possibility. I’d be ok with that.The free market works if it is allowed to. The only reason wages have not kept up with inflation is because government benefits have more than compensated for the failure of income to increase. Had government benefits not been a factor, I think the wage pressures would have been quite intense for companies to pay more.Cost of living pressures lead to either lower priced goods (deflation) or higher wages.Forcing higher wages is literally the worst thing the government could demand.