As the labor market struggles to put back to work more than eight million Americans who lost jobs during the Great Recession back to work, the pay that comes with those jobs is just as important.
Every first Friday of the month provides a bounty of data on the U.S. labor market. The unemployment rate gets most of the attention. Then there’s the number of jobs that were created or destroyed in the previous month. Those statistics are an important gauge of the job market. But when 91 percent of working Americans have jobs, we need to pay attention to what those jobs pay.
Would you be surprised to learn working Americans are making more on average now than during the depths of the recession? Average weekly earnings have been growing each month since December, and they are almost $37 per week higher compared to two years ago.
That’s a 5 percent pay increase for the average worker. Not bad, considering the sour economy in the past two years.
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But here’s why many don’t feel as if they’ve gotten a raise: Inflation has risen slightly more than average pay. Consumer prices are up 5.5 percent over the same two years. In other words, that average paycheck today has a little less buying power than that average paycheck two years ago.
Yes, a lot more of that pay goes toward food and energy costs. The $37 average wage increase won’t even fill up the gas tank.
While getting a steady paycheck is key for a growing economy, seeing that paycheck grow steadily is vital for a sustainable economy.