(WTVO) — A new federal jobs report has found that Americans’ “real wages” have taken their steepest drop in 25 years under the Biden administration.
The Federal Reserve Bank of Dallas published a new report that classifies a working person’s “real” wage as the amount they take home, adjusted for inflation.
“Despite the stronger wage growth due to the tightness of the labor market, a majority of workers are finding their wages falling even further behind inflation,” the report says. Workers’ wages, once adjusted for inflation, “have failed to keep up with inflation in the past year. For these workers, the median decline in real wages is a little more than 8.5%.”
The report said “the current time period is unparalleled in terms of the challenge employed workers face.”
Since President Biden has been in office, inflation has gone up by more than 13%, according to Peter Earle, of the American Institute for Economic Research.
As an example, a New Yorker earning $70,000 at $33.65 per hour would lose “roughly 25%” to taxes, according to Earle, bringing their income down to $52,500.
With inflation at 8.3%, the hypothetical resident is actually making the equivalent of $48,150, or $23.14 per hour.
“Between taxes and inflation, in August 2022, fully 32% — about one third – of wage earners take home is gone before they’ve spent a dime,” Earle told The New York Post.
Since March, the Fed has aggressively raised interest rates in an attempt to lower the highest inflation in 40 years.
New York Fed president John Williams said unemployment will likely rise from 3.7% to 4.5% next year as the economy tightens, saying “those who can least afford the essentials—like food, gas, and housing—suffer the most.”