Despite recent record inflation, the US labor market is being evaluated as robust, but more than half of US wage earners have experienced a fall in real wages because of inflation, a new survey found.
According to Reuters, economists affiliated with the Federal Reserve Bank of Dallas said in a report that 53.4% of workers recorded wage increases between the second quarter of last year and the second quarter of this year, lower than the 8.6% increase in the consumer price index (CPI) in urban areas.
“The tight labor market has made wage growth stronger, but for many workers, wages have lagged behind inflation,” economists said. Among those with lower real wages, the median wage decline was 8.6%.
This is not the only time real wages have declined in the past 25 years, but the report’s assessment is that the current situation is unprecedented given the difficulties faced by workers. The median real wage decline over the past 25 years was 6.5%, and the average rate of decline was between 5.7% and 6.8%.
In the midst of this, New York Fed President John Williams said in a speech the previous day that the unemployment rate is expected to rise from 3.7% to 4.5% next year. He also said that the damage caused by high inflation depends on income, and that “those who have the least ability to consume essential goods such as food, energy and housing suffer the most.”
San Francisco Fed President Mary Daley said today there is room for better balance in the labor market without clearly slowing the economy.
Among these, some say that overheating in the labor market has begun to subside as the number of job vacancies announced by the Federal Ministry of Labor in August was 10.1 million, down 10% from the previous month, resulting in a loss of about 1 million jobs.