American wages have taken a big cut since Joe Biden took office. Last year they experienced the highest wages in a quarter of a century.
Real wages lost about 8.5%, according to data published by the Dallas Federal Reserve last year. In the previous 25 years, the average reduction was 6.5%.
In November there will be legislative elections in the country, which are strongly conditioned by the rate of inflation that the country has experienced this year, the increase in financial resources, the achievement of federal policies to contain the rise in prices, and the cost of fuels that have been released from Russia during the invasion of Ukraine.
“We found that most of the real (inflation-adjusted) wages employed by workers could not keep up with inflation over the year,” the banker said, adding: “For these workers, the average decline in real wages is a little more. 8.5%.”
“Combined, these events appear to be the most severe against employed workers in the past 25 years,” the Federal Reserve added.
The unemployment data for September will be paid this Friday. However, this Thursday the number of applications for unemployment insurance were known, which were higher than the estimates, which shows that the labor market is not robust enough. The expectation is now focused on the announcement from the Federal Reserve on the interest rate update and growth data next week. During the week, it was expected that the general trend in both the US and the world would tend to slow down in growth estimates, warning of an impact on economic activity.
The managing director of the IMF, Kristalina Georgieva, anticipated this Thursday that the economy would cut growth projections, as the world’s leading economies were affected by lower demand and higher energy prices.
In the nearly two years of the Biden administration, inflation has risen more than 13%, according to Peter Earle’s economist.
The Consumer Price Index, a measure of the average prices of consumer goods and services, jumped 8.6% from the second quarter of last year to the same period this year.
“For 53.4% of these workers, in the second half of 2022, the median decline in real wage growth is 8.6%,” he added.
Over the past 25 years, the median wage decline was 6.5%, according to the Federal Reserve. Core inflation, which excludes volatile food and energy prices, rose by about 10% over the same period.
Last week, the Commerce Department released data showing that basic consumer prices were up 6.2% in August compared to the same period a year earlier.