Americans are taking the most severe pay cut in 25 years when adjusted for inflation.
“We find that a majority of employed workers’ real (inflation-adjusted) wages have failed to keep up with inflation in the past year,” the Federal Reserve Bank of Dallas. “For these workers, the median decline in real wages is a little more than 8.5 percent. Taken together, these outcomes appear to be the most severe faced by employed workers over the past 25 years.”
To explain further how severe were the losses for workers experiencing negative real wage growth, the bank said for the 53.4 percent of such workers in the second quarter of 2022, the median decline was 8.6 percent.
“How does the severity of the real wage decline in the second quarter of 2022 compared with the declines over the last 25 years? The average median decline over the last 25 years is 6.5 percent, with real wage declines typically falling in the range of 5.7 to 6.8 percent,” the report added.
A lot of factors that contribute to the salary decrease were mentioned by the bank, including the Consumer Price Index (CPI), which has skyrocketed to the highest levels in over 40 years since Biden assumed office. According to the Bureau of Labor Statistics (BLS), the latest CPI jumped eight percent over the last 12 months.
Naturally, the food-at-home index soared by 13.5 percent over the last 12 months. BLS stated that this has been the largest 12-month increase since the period ending March 1979.
“The index for other food-at-home rose 16.7 percent and the index for cereals and bakery products increased 16.4 percent over the year. The remaining major grocery store food groups posted increases ranging from 9.4 percent (fruits and vegetables) to 16.2 percent (dairy and related products),” the agency said.
Due to the rising prices, whatever raise in the wage could not offset the inflationary price increases. (Related: Understaffed and overworked: Nurses go on STRIKE in Minnesota.)
Meanwhile, the BLS reported that the U.S. workforce is not as productive as just a year ago.
Julia Pollak, chief economist at ZipRecruiter, said that an economic ennui has settled in among workers after the experiences of the last few years and that is showing up in the numbers. Productivity plummeted to 4.1 percent on an annualized basis – the biggest decline since the government started keeping track in 1948.
Nearly 20 million people were laid off within a few weeks during the peak of the Wuhan coronavirus (COVID-19) pandemic.
Twenty-two-year-old Brian Bouser received a text in the middle of his art history class at the beginning of the pandemic last year. The boss at the car rental company where he made $25 an hour informed him his pay was going down to $13.50 an hour, without any explanation. He immediately learned that all of his colleagues had seen their wages basically cut in half.
“I used to think having a job would make me secure,” said Bouser. “I no longer think that.”
Months later companies were suddenly desperate to hire, but existing employees were often worked to the point of burnout. Meanwhile, new hires with less experience were promoted and given a higher wage, with employers overlooking things that could have cost workers their jobs in the past. In the aftermath, productivity has seen the biggest drop on record.
“Productivity is the fuel of our economy,” said Pollak. “And if it continues to decline, the economy will shrink, quality of life will go down, opportunities will dry up and innovation and ideas will go elsewhere.”
Visit Collapse.news for more news related to the overworked and underpaid American workforce due to record-high inflation.
Watch the below video that talks about the misery Bidenflation has been bringing into every American household.
This video is from the Son of the Republic channel on Brighteon.com.
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