If it seems like your paycheck hasn’t kept up with inflation, you’re not alone—and you may be right.
A recent Wall Street Journal national survey found that about three-quarters of respondents feel that the cost of everyday goods and services has outpaced their household income growth over the past year.
This sentiment persists despite the fact that inflation, which has raised the price of essentials like food by over 20% since President Biden took office, has slowed significantly this year. In September, inflation rose by 2.4%, down from a peak of over 9% in mid-2022, according to the Labor Department.
One major issue for consumers is that although wages have grown in some areas to match price increases, after-tax wages have not kept up, says Ted Jenkin, co-founder of oXYGen Financial and business consultant.
“If wages grew by 4% over the last year and taxes reduce that growth by 1%, that leaves Americans with just 3% in real wage growth,” Jenkin explained to The Post. “Meanwhile, costs Americans face for things like car insurance, home maintenance, groceries, and education are well beyond that 3% increase.”
While wages have, on average, outpaced inflation since February according to Statista, price increases during the pandemic far outstripped wage gains, leaving many workers feeling that their raises have been negated by higher costs.
With recent easing in inflation, the Federal Reserve responded by issuing a half-point interest rate cut in September, aiming to address rising concerns about job market stability.
