Photograph:
Elise Amendola/Related Press
The headlines Friday mentioned that employee compensation grew at a file tempo on this 12 months’s first quarter, in accordance with the Labor Division. That may be good—if it weren’t for the inflation that’s wiping out these hefty nominal positive aspects.
Wages and salaries rose 5% for personal employees within the 12 months via March, and advantages rose 4.1%. Non-public employers are paying much more to maintain employees, who’ve bargaining energy amid a labor scarcity.
That sounds higher than it’s, nonetheless, as a result of inflation has erased the buying energy of these raises. Inflation-adjusted non-public wages and salaries fell 3.3% for the 12 months via March, and inflation-adjusted advantages fell 4%. Workers are making extra however they will purchase fewer items and companies with it. That is what economists imply once they name inflation a tax.
A separate report Friday, this one from the Commerce Division, discovered that actual private disposable earnings fell 0.4% in March and has fallen in 5 of the final six months. To place that in greenback phrases, in April 2021 disposable earnings per capita was $48,641 in 2012 chained {dollars}. In March this 12 months, that quantity had fallen to $45,997—a decline of $2,644. Ouch.
To adapt
Ronald Reagan,
are you higher off than you have been a 12 months in the past?
Copyright ©2022 Dow Jones & Firm, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared within the April 30, 2022, print version as ‘The Inflation Tax Bites.’
