Despite Wage Increases, Real Hourly Pay Is Losing to Inflation

Wage pressures are increasing but wages are losing to inflation.
Publish date:
CPI vs Hourly Pay Year-Over-Year Change 2021-05

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

Average Hourly Earnings Total Private 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 

Average Hourly EarningsProduction Minus CPI-W

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

  1. Huge Upward Wage Pressures for Both Skilled and Unskilled Labor
  2. Where Are the Job Openings and How Much Does One Make Per Hour?
  3. Year-Over-Year CPI Jumps 5%, That's the Most Since August 2008
  4. How the Fed's Inflation Policies Benefitted the Top 1% In Pictures Part 1
  5. How the Fed's Inflation Policies Benefitted the Top 1% In Pictures Part 2


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.


Imaginary Wage-Inflation Conundrum

Economists are puzzled over the wage growth conundrum. Wages were supposed to rise significantly. They didn't. Why?

Real Wages Decline Year-Over-Year

Wages are not keeping up with consumer price inflation. The average worker is worse off than a year ago.

Labor Productivity Up, Real Hourly Compensation Down

Labor productivity is inching along. Real wages are not keeping up.

Real Hourly Earnings Decline YoY for Production Workers, Flat for All Employees

Today's CPI report that shows inflation rose only 0.1%. Real wages are not keeping up even with that.

Real Hourly Earnings: Assuming You Believe the CPI

In the past year, real wages rose eight months, fell once, and were flat three times.

Mapping All the Jobs Created in the Recovery by Hourly Wage

On Friday, the BLS updated hourly wages and jobs information. Let's backtrack to the start of the recovery for details.

Real Wages Decline in December, Barely Up From Year Ago

Real wages for production workers fell 0.2% in Dec. Real wages for all employees fell 0.1%. Both barely up from yr ago.

Real Hourly Earnings Scorecards: Employees Making Way Less Than 9 Months Ago

Hourly wages, in real terms, have been on the decline for nine months.

Despite 213K Jobs Gain, Unemployment Up by 499K: Wage Growth Anemic Again

The labor force expanded by 601K sending the unemployment rate up to 4.0% from 3.8%. Wage Growth missed expectations.