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Real and Unreal Inflation: Workers Lost Money 9 out of 12 Months in 2021

For the average worker, prices rose faster than wages in 9 out of 12 months last year.
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Real Hourly Wages Percent Change Month Over Month 2021-12

Real means inflation adjusted.

Real Wage Key Points

  • The average worker lost money to inflation 9 out of 12 months in 2021. Workers came out ahead only in August, September, and December. 
  • Production and nonsupervisory worker did slightly better, losing money 8 out of 12 months. They showed a slight gain in July as well. 

Hourly Wages and Real Hourly Wages Percent Change 

Hourly Wages and Real Hourly Wages Percent Change 2021-12

Nominal Wage Key Points

  • On a nominal basis, wages only declined once, in March, and that was for total private. 
  • Wages were flat or positive every month in 2021 for production and nonsupervisory workers. 
  • In January, wages for flat for production workers and all private workers. 

Real Hourly Earnings Since 1964

Hourly Earnings and Real Hourly Earnings 2021-12

Hourly Earnings Key Points

  • The above chart shows nominal and real hourly earnings dating to 1964.
  • The series for all private workers only dates to March of 2006.
  • In in nominal terms, production workers made $4.05 per hour in February of 1973. Today they only make $26.43 per hour. 
  • In real terms, production workers made $9.38 per hour in February of 1973. Today they only make $9.66 per hour. 

Real and Unreal


In real terms, wages for production workers has only increased 28 cents in nearly 49 years!

That's just over a half-a-penny per year. Moreover, "real" is not very "real".

Neither the BLS nor the Fed counts housing prices or property taxes in their measure of inflation. 

CS National Top 10 Metro CPI OER INDEX 2021-10

Earlier today I noted Inflation is Up 7% in December Reaches Fastest Pace Since 1982

But in 1982, home prices were directly in the CPI. Today they aren't.

The alleged 7.0% year-over-year rise isn't real, it's unreal. click on the link for lots of details.

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