America's Talking - Inflation Continues to Outpace Wages, Data Shows

Episode Date: March 26, 2023

Inflation has outpaced wages for nearly two years, federal data shows. A closer look at federal wage and pricing data shows workers are making less overall as the price for all kinds of goods and services rise faster than average hourly wages. The U.S. Bureau of Labor Statistics tracks “real” average hourly earnings, which are wages of Americans with rising inflation taken into account. “From February 2022 to February 2023, real average hourly earnings decreased 0.3 percent, seasonally adjusted,” BLS said. “The change in real average hourly earnings combined with a decrease of 0.9 percent in the average workweek resulted in a 1.2-percent decrease in real average weekly earnings over this period.” Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hello, and welcome to America in Focus, powered by the Center Square. I'm Dan McAaleb, executive editor of the Center Square Newswire Service. Joining me again today is Casey Harper, the Center Square is Washington, D.C. Bureau Chief. Let's get into the news this week. For nearly two years, Americans have been dealing with suffering from elevated inflation. The cost of everything is much higher. There was hope that inflation was leveling off, but the latest data shows that, while it might have tempered a bit from the highs of last summer when gas prices, for example, across the U.S. reaching average of more than $5 a gallon, prices are still elevated. And it does not look like there's going to be much relief in the coming months.

Tell us more. Yeah, that's right. I mean, and I think it's not a new story that prices are rising. As you said, we saw record high gas prices last year. But the thing that we really honed in on this week is it's one thing for prices to rise. it's another fair prices to rise faster than wages, right? And it's important to point this out because President Biden has touted the increases in wages many times. And he's talked about how they've gotten wages up and he's really kind of spiked the football on this issue. But when you look at the data more closely,

we've seen that for almost two years, prices have risen faster than wages. I mean, the prices of all kinds of goods and services have risen faster than average hourly wages. So, and just to put a finer point on this, you know, what costs an American's $100 to buy when Biden took office now costs $115, right? And wages have not risen at that same rate, right? So even if you, you know, you would have had to have gotten an abnormally large raise compared to the average American just to keep pace with inflation. Right. So I can say it a lot of different ways. But that's that's the story here. Last year, for example, average hourly wages increased by 5%. but inflation rose by 7%. So I think they just put some more a finer point on it.

We try to simplify the economics of the center square.com because politicians can point to random data points and say wages increased so on so percent, but it's like, hey, let's just be truthful about what's happening here. Yeah, wages have increased, but prices have gone up faster. And that's, you know, Americans are paying the price for that right now. Right. And we've seen from polling, too, that because of elevated, inflation. Many Americans are changing their purchasing habits, either buying less, buying more

generic, going out to eat less. And of course, that has an impact on the entire economy. And I would argue, Casey, that this inflationary issue is impacting President Joe Biden's approval rating, which you wrote about this week. Yeah, you're right about that. Biden's approval rating has dropped to nearly the lowest point in his presidency, which is pretty amazing because it was a 45% in February, which was a lot better. And now it's dropped down to 38% this month. I mean, the lowest has been is 36% when that's when gas prices were breaking record highs. And so I think this inflation issue, you know, inflation has improved slightly, but it's definitely just, it's taken a big toll on President Biden's approval orating, you know, other issues. Like the 100 Biden scandal

has really picked up a lot. I think that's hurting the president as more and more evidence comes out that doesn't look too good. But, you know, the inflation issue is a steady hammer that's chipping away by confident, American voters confidence in Biden. But now with the bank collapses, the Fed just raised interest rates again. You know, the economy, as always, is one of the most important issues for voters. And right now, Biden is not ranked high on that issue. Yeah. As you mentioned, the Fed raised the interest rates another quarter percent this week, but that is less than some of the rate increases that it put in place last year when inflation was ranging.

I mean, there's still talk of a possible recession. Generally, what's the overall outlook right now for the U.S. economy when you factor in, the bank collapses, elevated inflation still, what the Fed's been doing with interest rates? What do you hear? Yeah, I think we're walking a tightrope right now. it might sound like something to celebrate that the Fed didn't raise rates as much as they have before, you know, as aggressively as some might thought. But I don't think so at all because it's very likely the only reason they didn't more aggressively raise interest rates is because

they were worried that the economy was too fragile to handle it because of the bank collapses. Right. I think it's very like, very possible that we're going to see more bank collapses because you know, the federal government encouraged banks to buy all these treasury bonds and investors of buy all these treasuries. And now those treasury bonds are so expensive because the interest rates have hiked up. And they're on the balance sheet of these banks. And so I think there's very likely we see more bank collapses. The Fed can't raise rates as much because of the fragility of the economy. So inflation is going to remain higher for longer. I think it's very, very possible that we're going to see this elevated inflation throughout this year. So yeah, just all rosy, rosy picture all around,

this is another story that our listeners can keep up with at thecenter square.com because we will continue to write about it because it's important to Americans everywhere. For Casey Harper, I'm Dan McAuliffe. Please subscribe. Thank you for listening. Freedom and liberty are important to all of us. If you're looking for civil, intellectual conversations with those shaping the future of freedom, try the Future of Freedom podcast with me, Scott Bertram. We speak with leaders across the country. in the greater conservative and libertarian movements. In-depth conversations about where the next intellectual battles will happen across the country.

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