U.S. Inflation Has Turned Wage Gains into Losses

Nov. 11, 2021 (EIRNS)—Rising inflation has driven down real wages for American workers for the past year, giving the lie to the universal media narrative that a “recovery” is lifting wage levels. The October consumer price index (CPI) from the Labor Department was accompanied by a press release on real wages. For all wage and salary earners, they are down by −0.6% from October 2020 for the average hourly wage and by −1.6% for the average weekly earnings. But for “production and non-supervisory employees,” real wages are down by −0.9% for the year for the average hourly wage, and by a significant −1.9% from October 2020 for the average weekly wage.

This triggered President Biden’s odd statement that his “new priority” is “reversing [!] inflation,” and he wants regulators to cut off speculation and drive down energy prices—as if he were in China, where it would be done! His fear is that the latest inflation surge threatens the $2 trillion “family spending bill” he wants next week (the half which remains of the “Hyperinflation Act of 2021”).

While energy, food (especially meat, poultry and eggs, the most cartelized agribusiness sectors) and used cars again drove the monthly CPI increase to +0.9% in October and +6.2% for the year, it can’t be forgotten that shelter cost inflation is essentially concealed from sight in this index by the Labor Department. As computed and publicized by the biggest rental ownership companies in the United States—the ones actually imposing the said rent increases—the inflation in rents over the past year is +15-17%. But in the CPI, it is currently an absurd +3%, because of the nonsensical way by which the Labor Department claims to determine it.

Economist John Williams of Shadow Government Statistics reports that if inflation were being calculated today by the U.S. government in the manner that it was done until the early 1980s (this is Williams’s special expertise), it would be running at +15% annually now.