In America, wage growth is getting wiped out entirely by inflation

The US Department of Labor announced on Friday that workers' wages in the United States were lower than one year ago. Gradual wage growth is not catching up with inflation.

The Department of Labor tracks the average hourly wage after inflation adjustment, which is called "real wage". According to federal statistics, the actual average hourly wage in July 2017 was $ 10.78, compared to 10.76 in July 2018. Real wages are falling sharply from the beginning of the year

"Despite the strong labor market, wage growth is below expectations of economists," Pew Research wrote in this week's report. "Indeed, despite some ups and downs in the last few decades, the actual average wage today is about the same as the purchasing power 40 years ago."

Last year gasoline prices, housing and transportation expenses soared, bringing out more value from people's salary. According to the nationwide average price of AAA trackers, the price of natural gas has increased by 50 cents per gallon over the past year. Second-hand car prices and rents are rising rapidly since one year ago, which may be difficult for American wage workers who need new cars.

If inflation surpasses wages, workers will be late. They need to spend more time trying to reduce costs from the budget, use credit cards or try the lifestyle they enjoyed a year ago. The US Department of Labor has reported that Americans spend a lot of time this summer work than last summer. It helps keep household income roughly the same.

The election campaign of President Trump has made it possible for Americans to start working again as Americans noticed the frustration of many working people, but made it possible for them to receive a raise, but it is just a challenging task for cards like the presidential president It was. Miss Obama's lack is like George W. Bush. Playing cards dramatically cut taxes on businesses and consumers, this year they funded many families and did not show wage data, but families have to make large tax cuts to compensate for energy consumption. And housing costs. The President has sent tweets to Saudi Arabia to produce more oil and strive to lower the price of natural gas.

It was in 2016 that the previous salary greatly exceeded inflation. Since then, the inflation rate has risen and the wage level has not changed. This summer, the inflation rate reached the highest level for the first time in six years, especially when the cards impose tariffs on Chinese products, steel and aluminum, most economists maintain inflation at the current level and grow even faster I'm confident. Increase in consumer costs

Most economists have predicted to record employment as salary goes up and many business leaders say their biggest problem is finding adequate workers. But so far, there are no signs that companies are raising wages to attract employees.

Another concern is that wage growth is not warm, not only behind the strong growth of employment but also largely destroyed by inflation. Wages rose by 2.7% compared to the same period last year, but in the relatively high Internet era, wages rose by about 4%. One explanation is that due to the decline of labor unions, employers can artificially lower wages, which weakens the workers' bargaining power. A recent report by Deutsche Bank cites changes in technology, globalization, tax policies and education as a driving force for inequality in the United States. This chart shows that in the mid 1980's, the trend towards the highest concentration of wealth began to appear. In the past, Americans became increasingly equal over time.

Since the global financial crisis, wage growth (unadjusted inflation) continues to slow down. In a sense this represents low inflation - the real wage growth in recent years has actually exceeded that of the 1980s, 1990s, and 2000s, but still very low - it is also serious It may represent recession. hangover. The weak labor market is the cause of low wage growth in the early stages of recovery and there may still be some impact in the near future; the more workers there, the more workers demand higher wages The ability to lower. Unemployment after the economic downturn and reintegration of new workers into the labor market are also generally lower than wages already paid, so there is a possibility that the wage rise may be slowed down. However, the particularly slow productivity growth over the past decade, coupled with the long-term strengths mentioned above, is also extremely important for explaining that wage growth is slow.