Average hourly wage growth has exceeded inflation for 12 straight months, according to new Bureau of Labor Statistics data released this morning. This real (or inflation-adjusted) wage growth is a key indicator of how well the average worker’s wage can improve their standard of living. As inflation continues to normalize, I’m optimistic more workers will…
The “real wages” is just the difference between the nominal wages and inflation. It’s negative when wages have increased but not as much as inflation, and positive when they’ve increased more than inflation.
So the literal number of dollars people are getting have been going up the whole time, but for a while there the amount of stuff your money could buy you was going down anyway. It’s recently the case that the amount of stuff you could buy has been going up. Not, you know, a lot, but…
Nominal is more than inflation so real is above 0.
Real just has to be above 0 for inflation adjusted wages to be going up.
I still call bullshit though without knowing where the increases are. All the increases could be in the top 10% with everyone else going down and only the average is above 0.
Edit: I was wrong, the growth is actually weighted toward the lower end.
looks at graph
Real wages are still below inflation. Nominal wage growth is what is above inflation.
Which means people are getting more money but it is worth less.
This means economic growth is down, and therefore the overall economy is demonstrably not in good shape.
*Edit To add from the article:
So… this doesn’t mean a whole lot then.
The “real wages” is just the difference between the nominal wages and inflation. It’s negative when wages have increased but not as much as inflation, and positive when they’ve increased more than inflation.
So the literal number of dollars people are getting have been going up the whole time, but for a while there the amount of stuff your money could buy you was going down anyway. It’s recently the case that the amount of stuff you could buy has been going up. Not, you know, a lot, but…
Nominal is more than inflation so real is above 0.
Real just has to be above 0 for inflation adjusted wages to be going up.
I still call bullshit though without knowing where the increases are. All the increases could be in the top 10% with everyone else going down and only the average is above 0.
Edit: I was wrong, the growth is actually weighted toward the lower end.