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Real Hourly Wages Decline 9 Out of 11 Months This Year

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16 comments on Real Hourly Wages Decline 9 Out of 11 Months This Year

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Real Hourly Wages

Today the BLS released its CPI report for November. We calculate “real” hourly wages by subtracting the monthly rise in CPI from the monthly increase in wages.

  • All Private: Real wages fell in January, February, March, April, May, June, July, October, and November.
  • Production and Nonsupervisory: Real wages fell in January, February, March, April, May, June, October, and November.
  • All Private real wages are deflated using the CPI-U numbers.
  • Production and Nonsupervisory real wages are deflated using CPI-W numbers.

Hourly Wages vs Real Hourly Wages

  • All Private: Compare the dark blue to the light blue 
  • Production and Nonsupervisory: Compare the dark red with the orange

The lead chart shows whether the difference is positive or negative. 

CPI Month-Over-Month 

The above chart shows CPI-U numbers. 

Consumer Price Inflation 

For more on the latest CPI numbers, please see Inflation Hits a 39-Year High in November, the Biggest Rise Since 1982

If you think your wages are not keeping up with inflation, it’s because they aren’t. 

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Blurtman
Blurtman
2 years ago
Sheeples don’t understand real, only nominal
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thimk
thimk
2 years ago
“Real Hourly Wages Decline 9 Out of 11 Months This Year ” . Well there’s an incentive to go back to work .  /s How many people  out there  that want to work just  for a car/gas/insurance  and rent ? Many say  fuggedaboutit
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Tony Bennett
Tony Bennett
2 years ago
Next give away about to wash ashore.  Federal student loan moratorium ends January 31st.  White House – at the moment – not looking to extend.  Schumer already pressing for extension and / or wiping away $50K per student.  I won’t spoil the ending …
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Eddie_T
Eddie_T
2 years ago
Reply to  Tony Bennett
It would be a better stimulus on the economy than many other giveaways I could name, because it puts buyers into the housing market. 
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Tony Bennett
Tony Bennett
2 years ago
Reply to  Eddie_T
Sure, everyone who has paid off their loans will appreciate.  This slippery slope nonsense needs to end.  What’s needed is a change in the law allowing discharge of student loans via bankruptcy.  Just like health care NO ONE ever talks of why cost has skyrocketed.  Instead focus on who pays. 
If debt wiped away (first of how many times??) education costs will spiral ever higher as there will ZERO incentive to control costs … just like in health care.
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Eddie_T
Eddie_T
2 years ago
Reply to  Tony Bennett
I do not disagree on the bankruptcy aspect.  On the same page as you there.
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StukiMoi
StukiMoi
2 years ago
Reply to  Eddie_T
Could you elaborate on exactly how “putting buyers into the housing market” is some sort of “stimulus.”
Some dunce in  DC arbitrarily signing a piece of paper “extending a moratorium” certainly doesn’t create any new real wealth by doing so. If it did, we could all just live large off of signing pieces of paper in DC and eating them.
So, as always when one speaks of activities producing no real wealth: Total real wealth is not increased at all. Hence, every single real dollar anyone receives as a “stimulus,” must therefore first be taken from someone else.
Now, exactly how is taking money from people too frugal, or poor, or intelligent, to waste it by paying $1 million for something which can be easily replicated for 1/10th that, “stimulating” anything other than ever more gross misallocation?
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Eddie_T
Eddie_T
2 years ago
Reply to  StukiMoi
You’re a real one trick pony.
Taking the overhang of student debt off the young adults who somehow managed to actually still get some kind of education….. in what has become an increasingly difficult world, will result in THEM happily taking on the biggest debt of their lives to buy a house, which is where the increase in money supply is going to come from….to keep BAU going for a few more years. It is inflationary, that is true.
But this idea that you can fix things just by turning off the money taps and letting the chips fall where they may? That might appeal to your sense of financial justice, but it won’t do most people much good……as it means trillions in notional wealth will go up in smoke and poor frugal people  will be even more poor and have to be even more frugal, because they won’t even have a job. 
Do you thing the Great Depression really did the poor and the frugal much good?
 
I’m neither frugal nor poor, but imho the best way to help the poor is to personally exit their ranks and end up with some assets. That’s what I did and it’s still working  for me. 
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StukiMoi
StukiMoi
2 years ago
Reply to  Eddie_T
“..it means trillions in notional wealth will go up in smoke.”
Will farmland go up in smoke? Grain decide to stop growing? Because some hack stops printing Washington’s face on paper pieces and hands them to dunces sitting on the couch waiting for the fungi in their walls to create some more “value”?
Oil reservoirs decide to dry up? Factories will fall over? Students magically forget all they “learned” in pursuit of their degrees in Ambulance Chasing and Nonsensical Gibberish Theory? Planes fall out of the sky?
All because some halfwit stops printing dead guys’ faces on paper pieces? Seriously? If that’s what “teaching our students to think (:rolleyes..) critically ” results in, no wonder the guys sticking to rote learning of the Quran has such an easy time kicking “our” butts…
“..this idea that you can fix things just by turning off the money taps and letting the chips fall where they may..”
In the real world (as strange as that may sound), grain really don’t decide to grow faster just because money is printed: Hence: All that printing actually does, is redistribute. Nothing else. No central bank has any wealth sitting in the basement to hand out. Hence, all they can do when they print money in order to save A from losing his claims to a chunk of wealth which already exist, is to take that wealth from someone else.
Or am I missing something? Is The Fed sitting on some Alladin’s lamp which can conjure farmland, factories and skills/knowledge out of thin air? Such that they can wave into existence trillions of real wealth which they can then hand to their closest buddies, without first taking it from someone else? From the looks of it, at least here on planet Not-Aladdin: All The Fed is able to produce out of thin air, is _claims_ to wealth. Not wealth per se. Hence, every additional claim to a piece of wealth handed to A, must necessarily reduce the wealth claimable by the set of not-As by an equal share. And corolarrlily, every claim to wealth not handed to A, will therefore leave not-A with claims to more wealth.
“Do you thing the Great Depression really did the poor and the frugal much good?”
Yes. It walked back some, though far from all, of the theft which had previously handed control over all resources to morons in New York and Chicago who, being morons and all they then promptly set about misallocating and squandering. Which sowed the seeds to the Great Depression. Then, when some of that theft was walked back, after a decade and a half of dustbowls then bombs: Americans experienced a boom in living standards, aka wealth, which lasted for 25 years. Until 1971. Then it was off to the races for another round of central bank facilitated crass theft, misallocation, depression, depravity and, with it, the new national passtime of collectively being retarded enough to believe the mold in walls of decaying shacks somehow create wealth.
“…the best way to help the poor is to personally exit their ranks and end up with some assets. “
Printing Washington’s face on paper pieces does not create any “assets.” Is that really so hard to comprehend? C’mon, people… Goodness…
Ergo, in order for The Fed to help “poor people end up with some assets”, The Fed would then first have to take those assets from someone not-poor. They are not able to create any. Neither do any pop into being from thin air. Nor do wall fungi create any. Hence, in order for The Fed to help someone poor to get some, they have to (this is basic arithmetic, really not hard stuff….) take it from someone not-poor. Do you honestly, seriously, try thinking through your answer, believe that “taking from the not-poor” is what printing money to bail out banks, homeowners, funds and the rest of idle and makeworking Idiotopia’s favorite playthings, is doing?
As for one-trick pony: Crass theft is a one-trick problem. And crass theft is why Americans are getting poorer. And is becoming the uncompetitive laughingstock of the world. Just Theft. Not Mexicans. Not Scary Chinese slave labor. Not “The Terrorists” Nor any other hobgoblin, all of whom are, tah-dah, imaginary.
Hence the solution is simple: Reduce (or eliminate) theft. Then the problem is solved.
Covering, what anyone intelligent enough to understand basic arithmetic immediately recognizes as simple theft; under a mountain of jargon’y-sounding babble about “assets” and “GDP” and “Inflation” and “Consumer Prices” and “Liquidity”; none of which has any defined meaning; for no other reason than to allow illiterate theft beneficiaries to pretend they understand anything at all; does not change the fact that the problem is systemically enforced redistribution; not voluntarily agreed to by those redistributed from. Which is just a longwinded way of spelling systemic theft. Simple as that. And hence, the solution is just as simple. Just, as Trump said (even broken clocks….):Stop the Steal.
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Christoball
Christoball
2 years ago
Reply to  Eddie_T
Why add fuel to an overly subsidized  and leveraged Real Estate market. Real Estate should stand on its own two legs. Real Estate has so many tax advantages that houses are no longer a place to live but an investment. We owe a lot of homelessness to this.
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Greggg
Greggg
2 years ago
Reply to  Tony Bennett
… and then there’s the Senate which is a much higher hurdle.
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Tony Bennett
Tony Bennett
2 years ago
Not apples to apples, but  
Per cpi “shelter” up 3.8% year over year.
While
Since January of this year, the national median rent has increased by a staggering 17.8 percent. To put that in context, rent growth from January to November averaged just 2.6 percent in the pre-pandemic years from 2017-2019.
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Eddie_T
Eddie_T
2 years ago
Reply to  Tony Bennett
Just slightly understated. lol.
Residential real estate reasonably leveraged  with 30 year money locked at current rates is the best inflation hedge I can imagine.
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numike
numike
2 years ago
Part of the reason people might be upset. Real wages are down ~1% since the pandemic.
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Eddie_T
Eddie_T
2 years ago
In our business it’s just more of the same…..it’s what’s been going on for several years, but now taking a turn for the worse. A LOT of upward pressure on our payroll with no new income to support it.  I realized a decade ago the my future was  going to be getting squeezed between capped fees and rising costs.  This is the most likely thing to finally make me retire, more so than any other reason I can think of.
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TechLover1
TechLover1
2 years ago
Reply to  Eddie_T
Eddie,
I am in similar boat in terms of pricing vs rising costs although I am in my early 40s so I can’t retire yet.
I do see aggressive price increases by service business around me recently though. We did a 13% price increase in Feb 21 and only two customers mentioned it in the last nine months. We are still priced below our local competition so my prices are going up 10-15% next month.
Wages have increased 15% for me and all other supplies etc are up 20% as well this year. I actually see price increases going on an escalated path going forward. Many small businesses will close thereby reducing supply and putting even more pressure on prices to go up.
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