TYLER GOODSPEED: We keep hearing the White House tout these big nominal wage gains. We heard it when the latest June jobs numbers came out. They were touting these big nominal wage gains. But the problem is you can't eat wages. Wages have to be able to buy real goods and services.
And so once we factor into account what's been happening with inflation, we see that real wages have actually been declining. So last month, real weekly earnings were down 10% at an annualized rate. Overall through the first six months of 2021, real wages were down almost 4%.
And there are a lot of compositional issues at play because of who's coming into the labor force at this point in the recovery. But even if we address those compositional issues by looking at, for example, the employment cost index or looking at what's happening to aggregate real earnings, we see that real wage wages are just not keeping pace with these big month-over-month increases in inflation that we've been seeing.
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