Commentary
For the average worker, prices rose faster than wages in nine out of 12 months last year.
Real means inflation adjusted.
Real Wage Key Points
- The average worker lost money to inflation nine out of 12 months in 2021. Workers came out ahead only in August, September, and December.
- Production and non-supervisory workers did slightly better, losing money eight 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 non-supervisory workers.
- In January, wages were 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 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 have 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 percent year-over-year rise isn’t real, it’s unreal. Click on the link for lots of details.
From MishTalk.com
