In U.S., wage growth is being wiped out entirely by inflation

The following article by Heather Long was posted on the Washington Post website August 10, 2018:

Applicants chat with potential employers during a jobs fair at Minneapolis International Airport on July 17. Credit: David Zalubowsk, AP.

Rising prices have erased U.S. workers’ meager wage gains, the latest sign strong economic growth has not translated into greater prosperity for the middle and working classes.

Cost of living was up 2.9 percent from July 2017 to July 2018, the Labor Department reported Friday, an inflation rate that outstripped a 2.7 percent increase in wages over the same period. The average U.S. “real wage,” a federal measure of pay that takes inflation into account, fell to $10.76 an hour last month, 2 cents down from where it was a year ago.

The stagnation in pay defies U.S. growth, which has increased in the past year and topped 4 percent in the second quarter of 2018 — the highest rate since mid-2014.

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