Hourly earnings at 'steepest' decline in four decades, BLS report shows

 SOURCE:

Hourly earnings at 'steepest' decline in four decades, BLS report shows | Peach Tree Times

Sky-high inflation, which recently hit 9.1%, is causing the sharpest real wage decline in several decades.

Even with the presence of a strong job market, workers in Georgia and across the nation are finding themselves financially worse off with each month that passes as consumer sentiment quickly falls.

"REAL (inflation-adjusted) hourly earnings DECLINED at the steepest in four decades in June,” Joel Griffith, Heritage Foundation research fellow and economist, wrote in a tweet July 14. “For a couple earning $100,000 last year, this is a $3,600 pay cut in 2022."

The U.S. Bureau of Labor Statistics (BLS) reported July 13, real average hourly earnings decreased 3.6%, seasonally adjusted, from June 2021 to June 2022, and decreased 1% from May to June.

This comes as the BLS released the Consumer Price Index (CPI) data for the 12 months ending June 2022 last week. The data showed a 9.1% all items annual increase, representing a 1.3% climb in June and a new four-decade high. The largest contributor was the increase in the index for gasoline, followed by the food and shelter indexes.

After subtracting CPI inflation, the average pay for non-managerial workers was down 2.7% over the last 12 months— the steepest drop since 1980 (except for a single month at the start of the pandemic, when data was distorted), according to an Axios report.

Average hourly earnings for private-sector workers are up 2.2% since December 2021, the report stated. Consumer prices also rose 5.4% during that period.

Consumer sentiment in June was reported at an all-time low. According to the University of Michigan's Surveys of Consumers results, June saw a -41.5% year-over-year change in the Index of Consumer Sentiment. The Index also saw a -14.4% change from May to June.

President Joe Biden's leadership has been criticized for months and many Americans disapprove his job performance. The latest New York Times/Siena College poll revealed the president's approval rating is now at 33%. With more than three-quarters of registered voters seeing the United States moving in the wrong direction, the New York Times reports that the "pessimism spans every corner of the country, every age range and racial group, cities, suburbs and rural areas, as well as both political parties."

The average household income in Georgia is $82,406, according to World Population Review. When adjusted for inflation, this number drops by $2,966, bringing the annual income to $79,440.