The real wages of America’s workforce are falling rapidly.
Wage growth is falling further and further behind as inflation continues to spiral out of control, the Washington Examiner reported.
The average hourly earnings for fall employees on private nonfarm payrolls rose by only 0.3% in April. This is lower than what was expected by economists, and according to data released from the Bureau of Labor Statistics this past Fredy, nominal earnings have increased 5.5% on an annual basis.
This earnings growth rate is far below the rate of inflation. Although April’s inflation numbers are not yet available, the Consumer Price Index grew by 8.5% in the year ending in March.
Real earnings appear to be falling by multiple percentage points.
On Friday, the White House Council of Economic Advisers acknowledged the unfavorable growth rates and said, “While we do not yet have inflation numbers for April, it is likely that yearly nominal wage growth was slower than inflation.”
Despite this data not being available, it can be determined that inflation earnings were falling at the fastest pace in 40 years before April.
Jason Furman, the chairman of former President Barack Obama’s Council of Economic Advisers, wrote in a post for the Peterson Institute of International Economics that the White House’s Friday statement “suggests wage growth may be slowing.”
This means that nominal wage growth is slowing while inflation continues to accelerate.
Furman’s analysis presented an estimate of wage growth that adjusted for the fact that recently released hourly earnings figures released Friday are affected by hiring practices in the current workforce. For instance, wages might be artificially lowered if more low-income workers are hired back within a given month.
Essentially what this means is that pay rates are not growing fast enough to keep up with the rising costs of daily essentials and other expenses like gas, groceries, or rent.
Falling real wages help explain why voters continue to give President Joe Biden and Vice President Kamala Harris poor ratings on their handling of the economy.
A poll recently conducted by CNN indicates that Americans overwhelmingly have a dismal view of the economy and hold Biden accountable.
Only 23% of Americans rate economic conditions as “somewhat good” and only 32% of Americans think things in the country are “going well.”
According to CNN’s poll, only 41% of Americans approve of Biden’s performance as president with 66% of Americans disapproving of how he is handling the U.S. economy.