Americans’ wages are losing ground to inflation at a steep rate, a report on Tuesday from the Federal Reserve Bank of Dallas said, a finding that offers some support for the central bank’s super-charged campaign to lower price pressures.
“Despite the stronger wage growth due to the tightness of the labor market, a majority of workers are finding their wages falling even further behind inflation,” economists for the Dallas Fed wrote. A majority of workers’ wages, once adjusted for inflation, “have failed to keep up with inflation in the past year. For these workers, the median decline in real wages is a little more than 8.5%.”
The report acknowledged over the last 25 years there have been other periods of lost ground on wages relative to inflation, but added “the current time period is unparalleled in terms of the challenge employed workers face.”