ICYMI: Workers Earn $1,400 More Since Pandemic

President Biden and Vice President Harris are fighting to lower costs and grow the middle class. While prices remain too high, we are making progress, with a recent Treasury analysis finding that wages have risen faster than prices by $1,4000 since the pandemic. The President and Vice President will keep working to lower costs for everyday items—from housing to groceries to health care—while Congressional Republicans try to raise prices by almost $4,000 a year while cutting taxes for billionaires and big corporations.

Read more below:

NBC News: The typical U.S. worker out-earned inflation by $1,400 a year, data shows
[Rob Wile, 8/28/24]

In the tug-of-war between paychecks and prices, the typical American worker has come out on top.

While higher costs for everything from milk to medicines have preoccupied U.S. consumers in the pandemic era, earnings have, on average, also risen enough so that the purchasing power of households has grown slightly. And blue-collar workers have been the biggest beneficiaries.

An analysis published in July by economists at the Treasury Department found that the median workers can afford the same representative basket of goods and services as they did in 2019 — plus have an additional $1,400 a year. […]

[M]edian weekly earnings, which include before-tax wages plus any commissions or tips, climbed 24%, for a gain of 2.3% beyond the inflation rate, the Treasury analysis found. […]

Blue-collar workers — who continue to be in demand in many sectors — saw earnings climb 3.8% over the period, compared with 1.6% for the median worker in the 75th percentile.

"This solid increase continues to reflect an improvement in the purchasing power for the median worker since before the pandemic and is good news for American households, " the department's researchers wrote in an update to findings released in December that first highlighted the trend. […]

"Price stability has returned," RSM Chief Economist Joe Brusuelas posted on X last week, adding, "the economy has an interesting way of trumping ideology and politics."

Gould, of the EPI, said that a combination of factors — including states increasing their minimum wages and economic policies keeping the economy near full employment, including government spending — have allowed Americans' purchasing power to come out ahead.

"Over the past four years, middle-wage workers have been beating inflation," she said.

What's more, rising pay has not necessarily hurt companies' bottom lines: Corporate profits and stock market indexes are both at record highs. In fact, the EPI's analysis of federal data shows labor's share of business income is hovering at record lows.

That means many companies could afford to pay their workers even better, Gould said.

"There's plenty of room for wages to rise even more and for workers to claw back some labor share that has gone to profit," she said.