Americans’ Wage Gains Being Destroyed By Biden’s Inflation

Americans are gaining in wages, but benefits seen from higher paychecks are being wiped out by the Biden administration’s stubbornly high inflation that shows little or no sign of abating.

The Federal Reserve Bank of Dallas Tuesday issued a report showing that, while wage growth remains strong because of the tight labor market, workers are not reaping the benefits.

And the news is worse for the majority of workers whose wages have not kept pace with inflation in the past 12 months. Those workers now see a decline in median income, adjusted for inflation, at slightly higher than 8.5%.

By comparison, the average median drop in real wages over the past 25 years, according to the Federal Reserve Bank, is 6.5%.

In fact, 71% of workers said in the Bank of America Workplace Benefits Report that their cost of living is outpacing salary growth.

Also, 62% of employees say they are stressed by their finances and a full 80% are worried about inflation. Roughly half acknowledged they have had to take action to deal with financial strain in recent months.

While losing ground on wages in relation to inflation is not unprecedented, the Fed report firmly stated that “the current time period is unparalleled in terms of the challenge employed workers face.”

The Fed has worked furiously since March to bring down the highest inflation rate in four decades, but so far has only made a small dent in soaring prices. And in their own forecasts, their work is far from over. The funds rate is expected to grow even higher into 2023.

It is no secret to the central bank that their efforts are going to drive up unemployment and contract the economy.

However, it is their belief that this is a necessary process to stabilize prices and gain “maximum employment over the longer term.”

The Fed also acknowledged the painful truth of the Biden economy — that high inflation is an unequal opportunity burden. Those with the least ability to pay elevated prices suffer the most, as paying for basic essentials is wiping out funds necessary for other expenditures.