More workers have better purchasing power today than they did before the pandemic, according to a new study showing that wages have grown more quickly than prices.
Despite the fact that prices are up 20% since the fourth quarter of 2019, wages for a typical worker are up 23%, according to The Center for American Progress (CAP) study.
"If wages rise more quickly than prices, workers can maintain or improve their standard of living — and since the start of the pandemic, wage growth for a typical worker has been higher than inflation," CAP said in the study.
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About 6 in 10 workers, or 57%, earned higher annual inflation-adjusted wages in November 2023 than the year before, CAP said. This translates into a median change, adjusted for inflation, of around 45 cents an hour, or a $900 annual increase for full-time, year-round workers.
"In fact, real wages for a typical worker stand at about the level expected if there had been no pandemic or recession in early 2020 and if they had kept growing at the same rate as in years prior," it added.
The findings may be music to the ears of many, especially job seekers. In December, jobs growth was stronger than expected, as Kiplinger previously reported. Rising wages continued to be a source of inflationary pressure.
Following news yesterday (January 31) that the Federal Reserve will hold interest rates steady, Fed Chair Jerome Powell told reporters that inflation has eased without a significant increase in unemployment. "That’s very good news," he said. "Nominal wage growth has been easing and job vacancies have declined," he added.
Meanwhile, in a July 2023 survey of about 1,000 consumers, the Federal Reserve Bank of New York found that, while the number of job seekers has dropped, their wage expectations have picked up. It also showed that, on average, the likelihood of working beyond age 62 declined slightly to 47.7% from 48.8% in July 2022, and the likelihood of working beyond age 67 edged up to 32%, from 31.3%.
As Kiplinger recently reported, a recent shows that the fields most likely to offer the best job growth and pay raises in 2024 include healthcare, information technology, government and manufacturing. To see the study's details by the numbers, visit the Resume Genius job hunting portal.
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