![]() As a result, average annual pay increased significantly during the pandemic, and as low-wage workers returned to the workforce and worked more hours, this moderating effect may mask wage increases that could be occurring for higher-wage workers. Meanwhile, workers earning higher salaries in knowledge industries at places like financial institutions and tech companies kept their jobs throughout the pandemic by working remotely. ![]() During the COVID-19 pandemic, businesses including restaurants, hotels, and entertainment venues shut down to slow the spread of the virus, causing many low-wage workers to become unemployed. While providing baseline economic context, this average overall wage indicator faces challenges that became evident during the pandemic. This represents one of the sharpest declines of real wages in Utah’s history. During the fourth quarter of 2021, as shown by Figure 2, Utah experienced a 3.2% year-over drop in real average wages as inflation continued to rise. Figures 2 and 3 show real and nominal average wage changes on a year-over basis. As Figure 1 shows, generally flat real average wages prevailed for the four-decade period between 1960 and the late 1990s (including during the high inflation of the 1970s and early 1980s), and have steadily increased over the past two decades. Bureau of Economic Analysis (BEA) estimate of wages and salaries, divided by the BLS estimate of the number of non-farm workers, adjusted for inflation as measured by CPI. While nominal wages increased over this period, businesses facing labor shortages and workers facing the continued real-world impacts of the highest consumer price inflation in four decades are thinking seriously about the impacts of high inflation on real (inflation-adjusted) wages.Ī valuable economic indicator, real average wages is calculated using the U.S. and at an even higher 9.7% for the Mountain region. Bureau of Labor Statistics (BLS) estimates annual Consumer Price Index (CPI) inflation at 7.9% for the U.S. As discussed below, this is particularly true for real wage indicators.įor February 2022, the U.S. Although it takes more effort than a quick glance at a single indicator, considering a range of economic indicators is critical to truly understanding the economy. Some economic indicators may not tell the full story, particularly when an indicator’s multiple contributing factors are not equally considered. While most provide value, each indicator also poses limitations. ![]() ![]() Various economic indicators provide a useful lens to analyze, interpret, and predict the state of the economy. This post explores aspects of real (inflation-adjusted) wage indicators. In particular, labor shortages and high inflation remain top of mind for many Utahns as a return to “normal” economic conditions remains elusive. The COVID-19 pandemic and its economic repercussions continue to reverberate throughout the Utah and U.S. ![]()
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