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Class of 2024: Young high school graduates have seen strong wage growth over the pandemic recovery (www.epi.org)

submitted 7 months ago by fukhueson to c/economics

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[–] BugleFingers 1 points 7 months ago (1 children)

I would like to additionally point out that people often misconstrue "Inflation" with "CPI". Whereas inflation is the devaluation of the dollar, CPI is the cost increases consumers actually face. Inflation is not horrendous at the moment, but the price gouging companies attribute to inflation is much greater than the actual inflation amount. This makes the cost of goods way higher and makes comparing against inflation effectively moot.

[–] fukhueson 1 points 7 months ago (1 children)

https://www.brookings.edu/articles/has-pay-kept-up-with-inflation/

We find that all four measures of typical and aggregate pay, adjusted by PCE, have grown since 2019. When deflating using CPI, we find smaller increases across three of the four measures and a decline in one measure. In other words, nominal pay by these measures has done relatively well in keeping up with overall costs of living since 2019, measured by PCE. Nominal pay has done somewhat less well in keeping up with increases in the costs of goods and services that are much more salient to consumers, measured by CPI. This pattern is consistent across time periods, with pay deflated by CPI experiencing smaller increases—or instead decreases—relative to pay deflated using PCE.

[–] BugleFingers 0 points 7 months ago (1 children)

Barring the issues CPI has itself with properly measuring costs on consumers, it seems your source does indeed agree that pay is falling behind the increase in cost of goods, consistently

[–] fukhueson 1 points 7 months ago (1 children)

Could you quote the section of the article where it says pay is consistently falling behind increases in cost of goods? My quoted section seems to disagree.

[–] BugleFingers 0 points 7 months ago (1 children)

"Nominal pay has done somewhat less well in keeping up with increases in the costs of goods and services that are much more salient to consumers, measured by CPI. This pattern is consistent across time periods, with pay deflated by CPI experiencing smaller increases" (last sentence compared to PCE)

[–] fukhueson 1 points 7 months ago* (last edited 7 months ago)

Right, what that says to me is that there are mixed increases and decreases.

When deflating using CPI, we find smaller increases across three of the four measures and a decline in one measure.

Could you tell me how that says there are consistent decreases? I mean, it even says there are consistent smaller increases.

Edit: additionally, the data tool they provide shows an overall increase in pay with respect to CPI.