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Inflation Has Eaten Up Nearly 100 Percent of Hourly Wage Gains Since 1973

Accounting for CPI inflation, wages for production and nonsupervisory workers is nearly the same today as February of 1973.
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Hourly earnings data from BLS, chart and inflation calculation by Mish

Hourly earnings data from BLS, chart and inflation calculation by Mish

Production and Nonsupervisory Wage Details 

  • Real (inflation-adjusted) wages for production and nonsupervisory workers increased from $8.04 in January of 1964 to $9.38 in February of 1973. That about a 16.7% gain but it was over 9 years.
  • Nominal wages rose from $2.50 to $4.05 that's a 62% gain over 9 years. 
  • In the next 50 years real wages rose from $9.38 to $9.64, about half-a-penny per year on average.
  • In nominal terms, wages rose from $4.05 in February of 1973 to $26.95 in March of 2022 but inflation ate nearly 100% of those gains.
  • The series is normalized to the 1982-1984 CPI.

Total Private Sector Wage Details 

  • The total private series only dates to March of 2006. 
  • Since March of 2006, nominal wages rose from $20.04 to $31.73.
  • Normalized to the CPI Index for 1982-1984, real wages rose from $10.04 in March of 2006 to $11.03 in March of 2022.

Real Hourly Wages Dive Again in March, Negative for 13 of Last 15 Months

A soaring CPI had led to negative real earnings. The drop in purchasing power was steep in March of 2022.

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For details and discussion of recent data, please see Real Hourly Wages Dive Again in March, Negative for 13 of Last 15 Months

For detailed discussion of the CPI, please see CPI Rips Higher to 8.5 Percent From a Year Ago, the Most Since 1981.

This post originated on MishTalk.Com.

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