The typical U.S. worker out-earned inflation by $1,400 a year, data shows
In the tug-of-war between paychecks and prices, the typical American worker has come out on top.
In the tug-of-war between paychecks and prices, the typical American worker has come out on top.
While higher costs for everything from milk to medicines have preoccupied U.S. consumers in the pandemic era, earnings have also risen enough, on average, to push up households’ purchasing power a bit. And blue-collar workers have been the biggest beneficiaries.
An analysis published in July by economists at the Treasury Department found that the median worker can afford the same representative basket of goods and services as they did in 2019 — plus have an additional $1,400 a year.
Of course, not all workers fall into the median, and consumers — including those who don’t work — have shouldered sharply higher prices (some of which are now falling). Steep interest rates, astronomical housing costs and a softening job market may better capture many Americans’ current financial realities than any single statistic.
“People might have been attached to prices of things where they were before,” said Elise Gould, senior economist at the left-leaning Economic Policy Institute think tank. “They have a meaning even if those goods are still affordable. There may be expectations about how much things are supposed to cost that haven’t caught up to reality, even if incomes have gone up.”
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