The U.S. Department of Labor has released data that shows people are making more money at their jobs, but because of high prices due to inflation the bigger salaries aren’t noticed in workers’ bank accounts.
On April 29, the Labor Department announced workforce compensation grew at a record pace during the first quarter of the year, but the Editorial Board at the Wall Street Journal noted that inflation is minimizing all gains.
“That sounds better than it is, however, because inflation has erased the purchasing power of those raises,” the Editorial Board said in their report.
In the 12 months leading up to March of 2022, wages and salaries increased 5% for workers, while in the year prior the same group only saw a 3% raise, the Bureau of Labor Statistics report said. The cost of benefits also went up by 4.1% in the same 12 months, compared to a 2.5% increase the year before.
“Inflation-adjusted private wages and salaries fell 3.3% for the 12 months through March, and inflation-adjusted benefits fell 4%,” the Editorial Board said.
The Board also noted that private employers are dishing out more cash to keep their workers, who now have increased bargaining power due to labor shortages nationwide.
“Employees are making more but they can buy fewer goods and services with it,” the Editorial Board said. “This is what economists mean when they call inflation a tax.”
Investopedia.com refers to the Employment Cost Index as a quarterly economic series that outlines growth of total employee compensation.
A separate report from the Commerce Department found that actual personal disposable income fell in all but one of the last six months and declined by 0.4% in March, the Editorial Board said.
All this comes as the price of gasoline continues to be a key indicator of inflation in America.
As of May 6, the national average for a gallon of gas was $4.28, and in Nevada it averaged $5.12, a AAA report said. At this point last year, the cost was $3.52 in the Silver State.
