Wages decline, Inflation soars – But nothing to worry about?

Americans’ take-home pay is eroding due to high inflation.

On Friday, the Bureau of Labor Statistics announced that consumer price inflation has reached a 6.8% rate — the largest year-over-year increase since June 1982, as well as the sixth straight month in which inflation has remained above 5%.

The agency also revealed that “real average hourly earnings” — which consider the impact of inflation upon purchasing power — fell by 0.4% between October and November. Though nominal average hourly earnings rose by 0.3%, the effects were overshadowed by a 0.8% increase in consumer prices.

Fortune explained:

U.S. workers at private companies earned an average of $31.03 per hour in November, according to the Bureau of Labor Statistics. Over the past year, workers’ hourly pay has increased by 4.8%.

But when you factor in inflation, real wages are down 1.9% over the past year, according to the BLS. From October to November, real average hourly earnings for all employees decreased 0.4%. Going back to the start of the pandemic, real wages have declined roughly 1% since February 2020, Furman estimated. 

As summarized by CNBC, some of the largest consumer price increases between November 2020 and November 2021 apply to goods such as:

  • Gas — 58.1%
  • Used vehicles — 31.4%
  • Hotels — 25.5%
  • Meat, poultry, and fish — 13.1%
  • Furniture and bedding — 11.8%
  • New vehicles — 11.1%
  • Domestic services — 10.2%
  • Jewelry — 6.7%
  • Electricity — 6.5%
  • Food — 6.1%
  • Apparel — 5%
  • Milk — 4.6%
  • Fruits and vegetables — 4%

A recent poll found that more than three quarters of Americans say inflation is impacting their lives. Yahoo News — which sponsored the survey alongside YouGov — reported:

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