The rise of inflation is making U.S. workers’ paychecks worth less than they were a year ago. Could the increase in wages be an economic strategy to divert people from the rise of living costs? Scroll down to see the results.
United States workers are seeing an increase in their paychecks. Many employers are raising hourly wages and many states are raising the minimum wage rate. While people are excited about the growth, those same wages are being wiped out by inflation.
The cost of living is now higher and rising prices are taking away from those wage gains. The cost of living went up to 2.9 percent from July 2017 to July 2018, according to the Labor of Department.
The Washington Post reported that the average U.S. “real wage,” a federal measure of pay that takes inflation into account, fell to $10.76 an hour. This number is surprising considering job openings have hit a record high, and unemployment rates have dipped to the lowest level in decades. Many employers are offering raises to attract and retain workers, but the gains have been small due to the rising prices.
What is to blame for rising prices? Many are blaming it on a jump in energy costs and some analysts are expecting the rising prices to come to a stop soon. If this occurs, inflation rates will go down and could possible lift real wages. The price of a gallon of gas has increased 50 cents in the past year, but is it over?
Inflation has hit a six-year high this summer and consumers are paying more for housing, health care, and automobile insurance, according to the Federal Government report. Additional price increases could be coming as President Trump’s new tariffs boost the prices of cheap imported products, which U.S. consumers rely on, according to the Washington Post.
Trump campaigned on promises of jobs and raises for the working-class Americans but delivering on his promise hasn’t been so easy. He’s not alone, as Presidents Barack Obama and George W. Bush have also had the same difficulty.
Workers in the top ten of the U.S. pay scale have seen a 6.7 increase in wages from 2009 to 2017, according to the left-leaning Economic Policy Institute. Workers in the bottom 10 percent saw a boost of 7.7 percent, which is mostly because of increases in minimum-wage. What about the middle class? For them, their wages have been decreased slightly and been mostly flat. African Americans, male workers and people with only a high school degree have had a rougher time.
Some economists think it has to do with the Great Depression, when workers were grateful for working, which made them hesitant to ask for more earnings at the time. They believe workers don’t feel like they have the power to ask for higher wages, which leaves employers with the option of feeling like they don’t have to pay more.
Sure, wages are rising, but people are still struggling to survive. Could the increase in wages be an economic strategy to divert people from the rising living costs? 30% of people say yes, it is not enough, while 70% of people don’t believe it is a setup in any way. Read the full story on the Washington Post here.
Here’s how people on the Zip app are weighing in on this all over the country!
The rise of inflation is making U.S. workers’ paychecks worth less than they were a year ago. Could the increase in wages be an economic strategy to divert people from the rise of living costs?
Yes, not enough
No, not a setup