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

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 

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 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. 

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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