You're Not Alone: 54.7% Of U.S. Salaries Haven't Kept Up With Inflation – Allwork.Space

Uncategorized

A new survey has found that 54.7% of U.S. salaries haven’t kept up with inflation. This isn’t shocking; historically, salaries do not keep up with inflation.  
This important national survey indicates that rising inflation levels have resulted in what is effectively a pay cut for the majority of U.S. employees. This is especially true for women. 
The U.S. consumer price index (CPI) currently sits at a four-decade high of 9.1%, and according to the survey, men are 33.3% more likely than women to have their salary matched to the CPI.  
The survey asked a nationally representative, weighted sample of 3,000 U.S. adults the following question: 
The results showed that across all age categories and genders, workers have seen their paychecks eroded by inflation. Mid- and advanced-career employees aged 45 to 54 were most likely to report having their salary outpaced by inflation (65.6%), whereas the youngest age group (18 to 24) were the least likely (43.8%).  
“These survey results indicate that the majority of the U.S. workforce is having their effective income reduced by inflation year-over-year. At a time when housing unaffordability and the cost of living is accelerating at a rapid pace, these data are particularly concerning. This is especially true for women, who this survey found to be affected by inflation more so than men,” said writer and analyst Liam Hunt, one of the authors of the study.  
Gender-based discrimination and systemic barriers that hold women back from receiving raises and promotions may play a role in keeping women from advancing in their salaries at the same rate as men, according to Hunt.  
According to CNBC, “during the pandemic, women were heavily employed in many of front-line industries that were hardest hit. And within those sectors, women were more likely to get laid off or voluntarily step out of the workforce to care for children.”  
The salary gap widens among higher-income workers and persists despite women’s increasing levels of education.  
Inflation and salary increases tend to move in the same direction over time, but they are driven by different influences.  
Inflation represents changes in the cost of goods, like groceries and gas. Wages are driven by changes to the supply and demand for labor, which can be caused by labor participation rates, technological advances, growth in productivity and demographic trends, according to Forbes 
Essentially, wages are difficult to reduce if markets change, which is why companies are slow to increase wages before understanding implications in the long term.  
“The main thing is for the Fed to raise interest rates, and to start selling off assets. The goal of that is to make it more expensive to borrow money to buy a house or to buy a car, or for a business to buy plants and equipment. And that will cool off demand in the economy, slow economic growth and slow inflation,” according to Jason Furman, a professor of practice at Harvard and a former top economic advisor to President Barack Obama.  
Jerome H. Powell, the Federal Reserve chair, has called the labor market “unsustainably hot,” and the central bank is raising interest rates to try to cool it. 
With nearly twice as many open jobs as available workers and companies struggling to meet demand, many economists and policymakers believe that what the economy actually needs currently is less hiring and less wage growth.  
The Fed will do what it can to slow down inflation but this might also come with some negative consequences, such as stunted hiring, lower wages, and it becoming more difficult for Americans to buy homes and cars.  
Front-line workers, who saw some of the biggest wage increases since the start of the pandemic, have seen at least half of those gains wiped out by inflation, according to Vox 
If inflation continues as it currently is, American could get stuck in a cycle of rising wages only to see those gains eradicated by inflation. Real wage gains for workers are only likely if, as economics suspect, inflation does subside. 
Employers aren’t too happy about the situation either because they have to spend more to keep their employees from looking for better wages elsewhere. In order to keep those workers, employers may need to raise wages along with inflation rates, or offer better benefits, or both.  
Raising wages is the most straightforward approach. According to Payscale, 44% of companies plan to give raises of 3% or more on average this year. Fewer than 10% are raising wages more than 5%, which would be more in line with inflation. 
In future, we may see some companies fail due to the cost of retaining employees, but if inflation subsides substantially, this will be less of a problem.  
Emma Ascott is a contributing writer for Allwork.Space based in Phoenix, Arizona. She graduated from Walter Cronkite at Arizona State University with a bachelor’s degree in journalism and mass communication in 2021. Emma has written about a multitude of topics, such as the future of work, politics, social justice, money, tech, government meetings, breaking news and healthcare.
News and Features
Business
Tech
Marketing
Design
Work-life
CRE
Coworking
Workforce
Daily Digest
Podcast
Resources
Marketplace
Events
Press Releases
FlexSpace, Coworking
and Office Space

Los Angeles
New York
Chicago
Washington, D.C.
Houston
Dallas
Miami
San Francisco
Atlanta
Philadelphia
Seattle
Austin
Company
About Us
Submit to Allwork.Space
Contact
Advertise
FlexSpace
Terms Of Use
FlexSpace FAQs
Privacy Policy
Connect with Allwork.Space
Twitter
Linkedin
Facebook
Instagram
YouTube
Apple Podcasts
Spotify
Google Podcasts
©2022 Allwork.Space  l  Exploring the FUTURE OF WORK® since 2003.

source

Leave a Reply

Your email address will not be published. Required fields are marked *