K-12 Tax & Spending Climate: For the biggest group of American workers, wages aren’t just flat. They’re falling.

Jeff Stein and Andrew Van Dam:

This pool of workers includes those in manufacturing and construction jobs, as well as all “nonsupervisory” workers in service industries such health care or fast food. The group accounts for about four-fifths of the privately employed workers in America, according to BLS.

Without adjusting for inflation, these “nonsupervisory” workers saw their average hourly earnings jump 2.8 percent from last year. But that was not enough to keep pace with the 2.9 percent increase in inflation, which economists attributed to rising gas prices.

“This is very likely because of the spike in oil prices eating into inflation-adjusted earnings,” said Allen Sinai, chief global economist and strategist at Decision Economics. “We pay for energy-related costs out of our wages, out of our compensation. And it’s making a real impact.”

The fall in those wages has alarmed some economists, who say paychecks should be getting fatter at a time when unemployment is low and businesses are hiring.


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