According to recent data, the United States is currently witnessing the largest pay decrease in decades, in large part owing to inflation.
The Federal Reserve Bank of Dallas, one of numerous regional Fed banks located throughout the country, has published new salary and pricing data, and unfortunately for Americans, it is not good news.
According to the statement made by the central bank, We find that a majority of employed workers' real (inflation-adjusted) salaries have failed to keep up with inflation in the past year. The median drop in real pay for these workers is a bit more than 8.5 percent, the report states. When taken as a whole, these results seem to be the most severe that employed workers have had to experience throughout the course of the past 25 years.
According to a research by the Fed bank, more than half of all Americans have seen a reduction in their salaries over the course of the previous year.
The question that was posed by the group was, How severe are the losses for workers facing negative real pay growth? The median fall in real wage growth for the 53.4 percent of workers who fell into this category during the second quarter of 2022 was 8.6 percent, with half of the declines being bigger and the other half being smaller. How severe was the drop in real wages during the second quarter of 2022 when compared to other periods throughout the past 25 years when real wages have fallen? The reduction in real wages has often been in the range of 5.7 to 6.8 percent, while the average decline over the past 25 years has been 6.5 percent, making the median decline in real wages 6.5 percent.
The bank cited the Consumer Price Index, which, since President Joe Biden took office, has increased to the greatest rate in the past forty years. This rate is the highest it has been in that time period. According to the most recent report from the Bureau of Labor Statistics' Consumer Price Index, annual inflation has now topped 8%.
Some costs, including those for groceries, showed even bigger percentage points of increase.
According to the Bureau of Labor Statistics (BLS), the food at home index grew 13.5% over the last 12 months, the biggest 12-month gain since the period ending in March 1979. Over the course of the past year, the index for cereals and pastry items jumped 16.4 percent, while the index for other food consumed at home gained 16.7 percent. Fruits and vegetables registered a 9.4 percent increase, while dairy and allied products posted a 16.2 percent increase while the remaining major food groups sold in grocery stores posted increases.
These price rises have outpaced pay gains, which means that some workers who even earned a raise this year did not see an increase that was significant enough to offset the effects of inflationary price hikes.
According to the Federal Reserve Bank of Dallas, although the preceding 25 years have witnessed episodes that demonstrate either a greater incidence or larger amplitude of real wage decreases, the current time period is unique in terms of the problem employed employees face.
The preceding is a summary of an article that originally appeared on Headline USA.