Wages Fall Behind Inflation for Seventh Consecutive Month

Though the rate of job loss slowed last month, both hourly wages and the weekly hours worked were lower, as the economic downturn continues to be felt in the job market. With today’s release of the consumer price index for April, we are able to examine the recent trend in real (i.e., inflation-adjusted) hourly and weekly earnings.

Since last October, average paychecks for blue-collar production workers and non-managers in services who make up 80% of the workforce have been losing ground in real terms.

In most of these recent months, real weekly earnings have been falling faster than hourly earnings. This is due to the loss of hours worked. In April 2008, for example, real hourly earnings fell 0.7%, while weekly earnings were down 1.0%.

Workers’ wages are thus facing two pressures in the current job market: hourly and weekly wage growth that is not keeping up with inflation and diminishing weekly work hours.

By Jared Bernstein

Source: Economic Policy Institute

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