On Saturday, The Conservative Review reported that wage growth for Americans is falling behind the rate of inflation.
The article reports:
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 Friday, 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.
The article notes:
Furman’s (Jason Furman, the chairman of former President Barack Obama’s Council of Economic Advisers) 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, and 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.
The middle class is being negatively impacted under the Biden administration. During the Trump administration the middle class saw increases in wages and upward mobility. Under the Biden administration, the middle class is struggling to hold its own.
In April, the Workforce Participation Rate dropped to 62.2 from 62.4 in March. That indicates that few Americans are in the work force. The highest Workforce Participation Rate in recent history was in February 2020, when it hit 63.4.