Workers in these two industries are the only ones coming out ahead right now | CNN Business

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At first glance, it seems that many Americans have gotten bigger salaries since the Covid-19 pandemic. started.

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But in reality, only workers Two industries – leisure and hospitality and retail – are really coming forward once inflation is taken into account.

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Overall, the wages and salaries of private industry workers increased Prices are considered rising, up 4.2% between December 2019 and this past June, according to an analysis of Employment Cost Index quarterly data by Harvard University economics professor Jason Furman.

Although, The analysis found that once inflation was factored in, paychecks actually decreased by 1.2% over that time period.

According to the Bureau of Labor Statistics, US consumer prices rose 9.1% year-over-year in June, the highest level in more than 40 years.

“Workers have more bargaining power to get bigger wages, but firms also have the power to set higher prices,” said Furman, a former chairman of the Council of Economic Advisors in the Obama administration. “And the prices are beating wages.”

Leisure and hospitality workers, which include waiters, cooks and hotel clerks, have been in huge demand following job losses when nonessential businesses closed at the start of the pandemic. According to Furman’s analysis, inflation-adjusted wages have increased by 0.9% since December 2019.

While the overall economy has now recovered all jobs lost during the pandemic, the leisure and hospitality sector still holds 1.2 million positions, or 7.1 percent below February 2020 levels, according to the Bureau of Labor Statistics’ monthly jobs report. Friday.

Retail employees, such as salespeople, cashiers and customer service representatives, have also been lured by employers. This has resulted in a 0.2% inflation-adjusted jump in wages for them. Employment in this sector is 208,000 more than its level in February 2020.

But employees in these industries have also seen their wage growth come down this year as inflation continues to rise. Wage increases for leisure and hospitality workers and retail workers were 2% and 1.2%, respectively, in the two years ended December 2021.

Employers in low-wage industries actually had to boost wages in 2021 to hire and retain the workforce they needed to meet demand, said Skanda Amarnath, executive director of Employee America, which specializes in high-wage, high-paying jobs. Advocates employment economy.

On the Consumer Price Index, a popular inflation measure, he said, “Right now, the CPI is very strong against everything else.”

In all other industries, inflation-adjusted wages have declined since the end of 2019, led by utility workers with a 2.7% decline.

Those employed in construction and information technology saw their wages drop by 1.8%, while workers in the manufacturing and financial sectors experienced a 1.7% drop.

Even wholesale trade workers, such as truck drivers, who were in demand during the pandemic because of supply chains, have lost ground. His salary has declined by 0.6% since December 2019. This is in stark contrast to the end of 2021, when his salary grew 0.1% over the past two years.

The Employment Cost Index report is closely followed by the Federal Reserve to see the extent to which skyrocketing inflation is pushing up wages. The data helps the Fed determine how much to raise interest rates.

But the Fed sees wage growth before the effects of inflation, and it remains strong. The jump of 5.3% in the year ending in June was the highest since the spring of 1983.

So despite the decline in inflation-adjusted wages in most industries, the Fed is expected to continue raising interest rates this year to try to slow the rise in prices, economists say.


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