Can We Please Stop Using Nominal Wage Figures to Tout New Records?

Here is the Wall Street Journal today:

Wage growth accelerated, with average hourly earnings for private-sector workers climbing 0.34% on the month and up 2.9% over the past year. That was the strongest year-over-year gain since June 2009.

I am so tired of reading this kind of thing, especially in a newspaper aimed at the financial and business communities. The Journal is presenting nominal wage growth and calling it the “strongest” since 2009. But who cares? If inflation is running at 5 percent, that would be a wage decrease. If it’s running at 0 percent, that would be terrific growth. So what does real wage growth look like?

Adjusted for inflation—which is the only metric that matters to economists and workers alike—wages were up slightly more than 1 percent. The last time we saw growth that high was…16 months ago.

Real wage growth of 1 percent isn’t horrible. I happen to prefer looking at wages for nonsupervisory workers, which were up only about 0.6 percent, but that’s a matter of taste. What’s not a matter of taste is adjusting for inflation. Real wage growth in January was OK, but it was no record breaker.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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