Inflation ‘Wiping Out’ Wage Increases

Real wages decreased 2.4 percent over the previous year due to rampant inflation “wiping out” wage gains — despite Joe Biden’s “mostly false” claim last week that “working people actually got a raise”.

Fox Business: The Labor Department reported on Friday that average hourly earnings for all employees actually decreased 2.4% in December from the same month a year ago when factoring in the impact of rising consumer prices. On a monthly basis, average hourly earnings increased by just 0.1% in December, when factoring in the 0.5% inflation spike. 

By that measure, the typical U.S. worker is actually worse off today than they were a year ago, even though nominal wages are rising at the fastest pace in years. That’s because inflation is also surging: The government reported on Friday morning that the consumer price index rose 7% in December from a year ago, marking the fastest increase since June 1982, when inflation hit 7.1%. 

Prices are skyrocketing for necessities such as gas, which is up 50 percent from a year ago, and meat, up 13 percent. This has left working families with, effectively, a cut in pay, and many are worse off than they were when Joe Biden and Democrats took control of the federal government. Last month, seventy percent of Americans said they were concerned their income was falling behind the cost of living.

Washington Post: In interviews with more than a dozen workers, many said that despite considerable pay raises — as much as 33 percent, in some cases — they were still struggling to cover basic expenses. Several workers said they had taken second jobs to keep up with rising costs for groceries, gas and rent. . .

“Our house payment, insurance, food, gas — all of those things have gone up by at least 7 percent,” [Nicole Chociej] said. “I’m in a situation where I’m able to survive, but there’s no extra money for vacations or to spend on our nieces and nephews.”

Bottom Line: Real wages are down for American workers because of rampant inflation fueled by the Biden-Harris administration’s failing economic leadership.