The pundits are at it again, fretting over the latest poll numbers showing that President Biden is losing in the key swing states, especially those like Michigan, Pennsylvania, and Wisconsin, with heavy concentrations of working-class voters. With inflation down, unemployment at record lows, wages up, and infrastructure projects popping up across the country, the pundits wonder why aren’t these workers thrilled with the economy?
The not-so-subtle implication is that American workers are too dumb to realize that wages are rising faster than the higher prices they see all around them. Even Robert Reich, who I truly admire and hate to call out, recently wrote in his Substack that “wages are rising for American workers,” and he means real wages – wages after taking inflation into account.
Unfortunately for workers, Reich is wrong, as are so many other pundits who keep repeating the same erroneous point.
The St. Louis Federal Reserve has the go-to database that tracks the average weekly earnings of private sector production and nonsupervisory employees. These workers make up 82.2 percent of the total U.S. fulltime workforce, and 65.4 percent of all civilian employment, full and part time. If wages are going up for American workers, they should be going up for this very large segment of the working class.
But wages, after inflation, have gone down, not up, since 2020.
Let’s do the math.
Actual Wages Inflated Dollars
December 2020 $860.47 $1,035.80
December 2021 $915.19 $1,029.25
December 2022 $954.17 $1,008.02
December 2023 $997.44 $1,019.56
April 2024 $1,005.27 $1,005.27
The Actual Wages column shows the average weekly wages (from the FED data base) that workers received, not counting the impact of inflation.
The Inflated Dollars column shows those same weekly wages recalculated into April 2024 dollars. (This column is created by plugging the actual wages into the Bureau of Labor Statistics CPI Inflation Calculator.)
The rate of inflation in 2020 was only 1.2 percent. In 2021, it jumped to 4.7 percent, then 8.0 percent in 2022, and 4.1 percent in 2023. It took it’s toll on the buying power of wages.
Inflated Dollars shows how much money it would take in today’s dollars to match what the average weekly wage could purchase back then.
For example, in December 2020, it would take $1,035.80 in today’s money to buy what $860.47 bought then. As wages go up year by year, what those wages can buy changes based on how much prices are rising (or, we wish, going down).
If wages were going up faster than inflation, then April 2024’s actual dollars earned would be greater than December 2020’s inflated dollars earned.
But, in fact, the actual buying power of worker wages dropped from $1,035.80 in 2020 to $1,005.27 this past April.
Inflation is cruel. You get a raise, you have more money in your pocket, and inflation takes it away, and then some. Since the end of 2020, average weekly wages jumped by 18.8 percent --from $860.47 to $1,005.27. But for the average worker that was a mirage. In terms of buying power, which is what really matters, wages after inflation actually fell by 2.9 percent.
Hmmm. Maybe those workers who complain about inflation aren’t so dumb after all.
Jobs, Jobs, Jobs?
Unemployment is low, and new jobs are being created in record numbers, but that’s only half of the jobs story. The other half concerns layoffs, lots and lots of them, as Wall Street destroys millions of jobs to pay for stock buybacks, leveraged buyouts, and mergers.
The super-rich get richer by laying off workers and nothing is being done about it. (See Wall Street’s War on Workers for all the gory details.)
Jobs are being destroyed even in the booming high-tech sector. In 2022, according to Layoffs.fyi,165,269 workers were laid off. In 2023, the high-tech layoffs jumped to 263,180, and so far this year another 84,060 have been let go.
Overall, Challenger, Gray & Christmas, a job search and career coaching firm, report 554,100 layoffs in the last 9 months (August 2023- April 2024). That’s a lot of unhappy workers who have gone through the hell of losing their jobs. They are not likely to praise the economy or the politicians trying to take credit for it.
It might be wise to stop hyping how wonderful the economy is for working people. Macro numbers, even when they tell a better story than the adjusted wage data, don’t cut it for workers who know that wages aren’t keeping up with prices and that losing a job is an awful experience.
This is not an argument to vote Republican. Rather it’s an argument to face up to the truth about our political and economic system. It’s rigged against working people, and they know it, even if the pundits don’t.
This is an argument for revolution.
Dearest Substack readers and workers,
Ifyou haven't realized the Republican/Democrat division is a scam meant to waste your precious time and prohibit you from seeing other Americans as your allies so we can finally take this country back from Wall Street, please put some smelling salts under your nose. Dunk your head in ice water. WAKE. UP.
Ain't none of those politicians gonna help you. Their job is to hold a Big Red Bow iin front of your face while they rob you blind. It doesn't have to be like this. It isn't like this for billions of people around the world!
We have the power, together. So, talk to your neighbor. Smile at people. Rediscover what we have in common and ignore the bastards who try to divide us and keep us arguing.
Says my 95 year old mom about the pol and econ assertions of the elite: "They think we're all stupid."
Exactly. Few among us mere workers have Ivy League degrees. Many of us fear math and are unsure of our ability to decipher the arcane chants of the econ priesthood who dictate econ commandments and urge obedience to some grand 'invisible hand.'
But we can see all the evidence to the contrary with our own eyes. How has purchasing power fared over the last decade or two? That's without questioning the dubious COLA calculations by our pol (and econ) overlords which don't include the full costs of food and energy.
So now we have the real numbers!!! No matter how hard the elite and their allies in the media try to gaslight us, try to convince us we just don't understand, we do. Our income actually IS decreasing; few elected officials acknowledge this as fact, let alone try to do anything to help us.