Many Americans are getting higher hourly wages after the largest hourly national wage increase in non-supervisory and production work in four decades. Yet somehow, the average worker is still worse off. How is this possible? Massive, massive inflation.
The average hourly wage went up by just under 6.7% last month according to a report by the Bureau of Labor Statistics. The total increase on average comes out to about $27 a week. While that may not sound significant, for the average worker it is, or it should be. It should be the difference between quality food products and knock-off brands. But it’s not working out that way.
WolfStreet describes a similar wage spike in 2020 after the first round of lockdowns, saying:
“Many low-wage employers were shut down, and employees were laid off. Their lower wages fell out of the average, while many in higher-paying service jobs like financial services and tech switched to working from home. As millions were laid off, the higher wage earners took up a bigger portion of the job market and pushed the year-over-year gains up in average hourly pay. In April and May 2021, the low gains reflect the high base a year earlier.”
For people just getting back to work after the lockdowns, and those entering the workforce for the first time, it feels pretty good, at first. Then when they go out to buy groceries, come up short for rent, and then get hit with a utility bill twice its normal size, the honeymoon ends.
Speaking of rent, the price of a single-family home or apartment went up 17% over last year’s prices. This is much higher than the normal rate at which the cost of living increases. Nondurable goods went up by just over 10% in February and the price of durable goods went up by nearly 19%.
According to the Bureau of Labor Statistics, the American Dollar has decreased in value by 5% over the last two years while national hourly earnings have gone down every month for the last 11 months. It sounds like some people are getting a free lift up the mountain, and then getting dumped off a cliff.
All of this makes sense when you consider the fact that many workers left the job market voluntarily. This was made possible by the proliferation of the notion that staying in your house to avoid sneezing on someone’s grandma is somehow heroic. Also, with massive government handouts and rent moratoriums, people felt like they didn’t have to work. If you were on welfare, lived in HUD housing, and got all of your lockdown payments, you might have made it through the entire so-called pandemic without raising a time card.
Because so many workers refused to go back to work, employers had to offer higher-paying low-level jobs in order to draw workers back in. That is why Amazon is so aggressively advertising jobs in their fulfillment centers, and God help you if you get sucked into that slaughterhouse for the soul.
WolfStreet goes on to say:
“Those who earn [higher] hourly wages will not be fine. Their raises may make them feel better until they have to fill up their car, buy groceries, pay rent, or buy a car. And if they want to buy a house, they can forget it.”
Recently, we wrote about Blackrock, the largest financial management firm in the world, has been buying up houses at well over the asking price. In so doing, they have been freezing normal home buyers out of the market and generating a permanent underclass of renters.
Pundits and economists talk about inflation as if it was a rhetorical exercise. Meanwhile, the living man and woman who has to subsist in the markets they write about feel the full weight of the burden that is being lowered into their already hunkered backs.
Never fail to notice, the poor, the working class, and the elderly are always the ones who feel the pain. It is never those who make the decisions that cause inflation, never the governors who declare knockdowns, never a former vice president who imposes sanctions that cripple markets all over the world.
It is you and always you who takes the pain and the blame.