Real and Unreal Inflation: Workers Lost Money 9 out of 12 Months in 2021

January 14, 2022 Updated: January 14, 2022
Commentary
For the average worker, prices rose faster than wages in nine out of 12 months last year.
Epoch Times Photo

Real means inflation adjusted.

Real Wage Key Points

  • The average worker lost money to inflation nine out of 12 months in 2021. Workers came out ahead only in August, September, and December.
  • Production and non-supervisory workers did slightly better, losing money eight out of 12 months. They showed a slight gain in July as well.

Hourly Wages and Real Hourly Wages Percent Change

Epoch Times PhotoNominal Wage Key Points

  • On a nominal basis, wages only declined once, in March, and that was for total private.
  • Wages were flat or positive every month in 2021 for production and non-supervisory workers.
  • In January, wages were flat for production workers and all private workers.

Real Hourly Earnings Since 1964

Epoch Times Photo

Hourly Earnings Key Points

  • The above chart shows nominal and real hourly earnings dating to 1964.
  • The series for all private workers only dates to March of 2006.
  • In nominal terms, production workers made $4.05 per hour in February of 1973. Today they only make $26.43 per hour.
  • In real terms, production workers made $9.38 per hour in February of 1973. Today they only make $9.66 per hour.

Real and Unreal

In real terms, wages for production workers have only increased 28 cents in nearly 49 years!

That’s just over a half-a-penny per year. Moreover, “real” is not very “real.”

Neither the BLS nor the Fed counts housing prices or property taxes in their measure of inflation.

Epoch Times Photo

Earlier today I noted “Inflation is Up 7% in December Reaches Fastest Pace Since 1982.”

But in 1982, home prices were directly in the CPI. Today they aren’t.

The alleged 7 percent year-over-year rise isn’t real, it’s unreal. Click on the link for lots of details.

From MishTalk.com

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

Mike Shedlock / Mish is a registered investment advisor for SitkaPacific Capital Management. On my “MishTalk” global economics blog, I write several articles a day on the global economy. Topics include interest rates, central bank policy, gold and precious metals, jobs, and economic reports, all from an Austrian Economic perspective.