Raises will be going into pockets -- and out shortly after -- as a new report has shown inflation in the U.S. is causing most workers not to see the benefit of their yearly pay increases.
With the U.S. labor market struggling to fill positions, millions of Americans have received substantial raises. As a result, the average hourly worker’s earnings have jumped nearly 5% in the last year alone, CBS News reported.
Despite pay rising as fast as it has in years, the typical American worker is still worse off today than they were a year ago.
The main reason for workers not seeing any benefit to rising pay is inflation. In October, consumer prices increased 6.2% from a year earlier, an increase that hasn’t been that steep in 30 years.
Inflation is forcing workers to lose most of their gains and pushing many into the red as “real wages” for average hourly earnings has decreased 1.2% from October 2020 to October 2021, the Bureau of Labor Statistics found.
“Real wages” represent the income someone makes after accounting for the impact of rising prices, showing a person’s actual purchasing power.
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Inflation has impacted a wide range of goods for consumers, with gas prices, food at grocery stores, and building supplies all rising.
A recent poll from the Washington Post and ABC News has found that 70% of respondents think the economy is in bad shape, and 38% described the nation’s economy as “poor.”
When it comes to President Joe Biden’s handling of the economy, only 39% approve, with over half of respondents saying they blame the president as the main reason for inflation hitting highs, the poll found.
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While most are struggling, low-income workers in the leisure and hospitality industry saw their nominal hourly wages rise 11.2% over the last year, meaning their “real wage” is coming out positive, CBS News reported.
However, most workers continue to struggle as inflation remains at a record high, and they continue to leave their jobs searching for something better.
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