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The U.S. economy is booming. So why are tech companies laying off workers?
(www.washingtonpost.com)
this post was submitted on 04 Feb 2024
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As a result, earnings have outpaced increases in prices such that real wages have increased since before the pandemic. Real weekly earnings for the median worker grew 1.7 percent between 2019 and 2023.[3] This means that one week of pay for the median worker now buys more than a week of pay did in 2019, despite higher prices. Furthermore, as shown in Figure 1, the increases in earnings are by no means concentrated at the top: in fact, they skew toward the middle class and the lower end of the income distribution. The 25th percentile of the wage distribution saw their nominal weekly earnings grow by $143, from $611 in 2019 to $754 in 2023. When adjusted for inflation, this amounts to a 3.2 percent increase in real earnings. Real earnings increases were particularly strong for the median Black and Hispanic Americans, who saw increases of 5.7 and 2.9 percent, respectively.[4]
Data doesn't lie.
I think one problem with the "vibes" everyone is giving here is that most people aren't as poor as they think they are. I suspect a lot of people on this site would not believe that one third of American households make less than $50,000 a year, and 8% of American households make less than $15,000 a year.. If you're making $80k and struggling, it can be tough to hear that "the poor" are doing better because you think you are one of the poor.
I appreciate a data supported argument, and love that you actually linked sources.
One thing that I feel is missing in most of the linked analyses is that inflation has also hit unevenly, and the price of basic goods has increased significantly more than overall inflation. Which would explain why households still have less disposable income, also the mean debt burden is much higher leading to loan costs being more common.
"Real wages" takes that into account. The term "real" (as in "real wages", "real earnings", etc) means the increase in money minus the increase in inflation.
So for example the top paragraph says there's been a "3.2 increase in real earnings". That means there's been a (pulling numbers out of my ass to illustrate): 7.5% increase in earnings, but also a 4.3% increase in inflation.
But price increases of cereals ( bread, pasta, grains, etc.) increased by about 7,5 % last year alone, which is more than the inflation, and more than the increase after inflation.
That's where people might complain. They still can't afford food, as food prices increase faster than overall inflation
That's a fair criticism, and the Biden administration is looking into more specific action with regards to grocery stores. More work needs to be done to bring food costs to a reasonable level. I'd also support a revising of the CPI to better account for necessities like food and housing.