Inflation has been edging up just a bit in the past few months, but so have people’s paychecks. The Labor Department’s latest data shows that Americans’ “real earnings” — that’s average hourly earnings after accounting for lost purchasing power from inflation — were up 1.3% year over year in November.
It turns out, for a while now, low and middle-income workers have been doing a bit better.
The Economic Policy Institute analyzed inflation-adjusted earnings from hourly wages, salaries, commissions, bonuses and stock options, and there’s been a decline in income inequality in recent years, according to economist Elise Gould.
“Stronger wage growth for the bottom 90%, compared to those at the top,” she noted.
It goes back to early in the pandemic, when millions of workers lost their jobs. “We had that government safety net,” Gould said. “When those jobs came back, they had a bit more leverage to bid up their wages.”
Since 2019, pay for the top 1% has only grown half as fast as the bottom 90% — but it has grown more than four times faster over the last 40 years.
Even with stronger wage growth for most workers lately, Luona Lin at the Pew Research Center said that a recent survey found “only half are highly satisfied with their jobs, and few are highly satisfied with their pay. The top reason they gave is their pay hasn’t kept up with inflation.”
Low-income workers were most likely to say they don’t make enough to cover their bills.
