Federal data from the American Bureau of Labor Statistics shows that the wage of the average American has declined by nearly two per cent, amid rising inflation.
The Daily Wire reports that the Bureau of Labor Statistics found that the average hourly earnings in the United States rose from $29.35 in June 2020 to $30.40 in June 2021 — a marked 3.6 per cent increase. However, due to soaring inflation in the Consumer Price Index, which has risen by 5.3 per cent since last June, “real average hourly earnings” have in fact diminished by 1.7 per cent over the same period.
To put the figure in context, an American earning $50,000 a year will see the equivalent of an $850 cut in yearly wages.
The decline in real wages has been getting worse for most of the year. As of last December, real average hourly earnings had risen year-over-year by 4.2 per cent. However, in the months from January to May, year-over-year rates declined to -2.6 per cent, before marginally improving to -1.7 per cent in June.
Moody’s Investors Service vice president William Foster summed it up best when he described inflation as a “tax” to CNBC, stating. “Inflation is a tax. That’s the best way to think about it.”
Inflation has been particularly evident for the working class, which has seen an erosion in its purchasing power over the past half year due to the rising costs of food, gas, and other amenities. Those who hold their assets in the form of land, securities, and investments, have been largely unaffected by the soaring prices.
President Biden has responded to the concerns about inflation by downplaying it as a sign of the recovering economy, and used it as an opportunity to promote his infrastructure plan. He said last week:
We also know that as our economy has come roaring back, we’ve seen some price increases. Some folks have raised worries that this could be a sign of persistent inflation. But that’s not our view. Our experts believe and the data shows that most of the price increases we’ve seen are — were expected and expected to be temporary.
The reality is, you can’t flip the global economic light back on and not expect this to happen. As demand returns, there’s going to be global supply chain challenges. We’ve seen that in semi-conductors, which are used in automobiles. That global shortage has slowed vehicle production, creating a temporary spike in car prices. That’s a real challenge. And my administration is doing everything we can to address it. But again, these disruptions are temporary.
Now, I want to be clear: My administration understands that if we were to ever experience unchecked inflation over the long term that would pose real challenges to our economy. So while we’re confident that isn’t what we are seeing today, we’re going to remain vigilant about any response that is needed.
So, if your primary concern right now is inflation, you should be even more enthusiastic about this plan. And as we promote — as we promote fair competition in our economy through the executive order I mentioned, it will drive down prices even further. New businesses will get in the game, competing against those giant corporations who have been free to ramp up prices because they haven’t had any real competition.