Skip to content

According to federal data, the average American’s wage is on the decline due to inflation. The Bureau of Labor Statistics found that “average hourly earnings” in the United States rose from $29.35 in June 2020 to $30.40 in June 2021 — a 3.6% increase. However, when factoring in inflation — specifically through the Consumer Price Index, which has risen by 5.3% since June 2020 — “real average hourly earnings” have diminished by 1.7% over the past year, despite a robust economic recovery during the same period. For an American earning $50,000 per year, the agency’s findings imply the equivalent of an $850 cut in yearly wages. The decline in real wages has been worsening for most of 2021. As of December, real average hourly earnings had risen year-over-year by 4.2%. In January, February, March, April, and May, the year-over-year rates declined to 3.8%, 3.4%, 1.6%, -1.7%, and -2.6% respectively, before improving to -1.7% in June. Between January and June, the inflation rate nearly quadrupled from 1.4% to 5.3%. As Moody’s Investors Service vice president William Foster explained to CNBC: “Inflation is a tax. That’s the best way to think about it.”

Notifications - Subscriptions
Notify of
3 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments

3
0
Would love your thoughts, please comment.x
()
x