Member-only story
Think Your Kids Will Be Worse Off Then You? You’re Probably Right!
Look to history, not headlines.
You’ve probably heard that inflation is on the rise, and you probably realize that your new paycheck might not be keeping up with inflation. For most Americans recent raises are falling behind increasing prices.
The headlines are full of announcements and analyses of the recent ups and downs of the economy. A few months ago headlines focused on wage increases. After that is was inflation. In the last few days it’s been the steady decline in stock market values.
But those headlines are only the latest drips and drags of a far more important story.
On the whole we are getting poorer, have been for decades.
Here’s the numbers:
According to the BLS, in the first quarter of 2022 wages increased by 4.9% from a year earlier, while the Consumer Price Index — the most common measure of inflation — rose by 8.0%. In other words, the cost of living increased by about twice as much as wages.
Even with that raise or good paying new job most Americans found themselves about three percent less buying power than a year earlier.
And prices are almost certainly going to continue their rise.
But wages won’t. Wages haven’t kept up with inflation for the last thirty years, and it’s unlikely they will in the near future. The recent increases we’ve seen are an anomaly.
But that’s only part of the picture.
Employers have been complaining about a lack of workers for several years, but only now are they increasing wages, but as we see, not by enough to outpace inflation.
In reality there are millions of people out of work who are sitting on the sidelines waiting for a chance to contribute to the economy. But we ignore them. We pretend they do not exist.
In 2017 Jessica Bruder wrote Nomadland, a bestselling book about economic migrants traveling the county in vans and RVs trying to cobble together a living, like something out of Grapes of Wrath. A movie based on the book and starring Frances McDormand won three Oscars in 2020.
