Inflation Has Turned $15 an Hour Wages into a Setback

  • Date: 17-Sep-2021
  • Source: Washington Post
  • Sector:Economy
  • Country:Middle East
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Inflation Has Turned $15 an Hour Wages into a Setback

Many Americans have been delighted to see wages rising since the end of the pandemic. But whether or not they realize it yet, inflation has already eaten up all of those gains — which highlights the fact that the U.S. economy has no system for making sure that wages keep up with inflation.

In recent months, there have been lots of stories in the media about how wages are rising strongly. And in fact, in dollar terms, that’s true:

Plenty of plausible economic explanations have been offered for this happy trend: Pandemic unemployment insurance offered generous benefits to those who didn’t go back to work, forcing companies to raise wages to lure them back; the danger of Covid-19 in workplaces necessitated a hazard pay premium; the rapid rise of technologies like automated restaurant ordering made workers more productive; and the Fed’s continued loose monetary policy, together with generous government relief spending, kept the economy running hot and the labor market tight.