Workers just earn $.12 more now than in 1972
An article by Jing Pan
March 2, 2023·5 min read
Persistent inflation is still making headline this year. But price levels have long been rising in this country — eroding the real wage of working Americans.
According to CNBC, American workers were earning an average of $27.45 per hour in June of 2022. Back in 1972, the same workers made an average of $3.88 an hour.
That’s serious wage growth right?
Not so fast. Those numbers are nominal wages that haven’t taken into account inflation.
When adjusted for inflation, American workers are earning just 12 cents more today than they did in 1972.
In other words, real wages — wages in terms of the number of goods and services that can be bought — have essentially been stagnant for 50 years.
“When the average American is not seeing his or her living standards increase over a period of decades, that’s something that should concern us all,” Harry Holzer, professor of public policy at Georgetown University, told CNBC last year
Fast forward to December of 2022, the average hourly earnings went up slightly to $28.07, according to the latest Bureau of Labor Statistics data. And while the inflation rate has decreased to 6.5% from 7.1% in November, it is still much higher than the Fed’s target rate of approximately 2%.
My input: During that same time frame inflation adjusted GDP more than tripled. My question is who benefited from the increased economic growth?