Got a Raise? You Still Might be Making Less (Than You Were)

Data on recent and speculation about future movement in wages and inflation have been all over the media in the last two months. Putting our recent economic overview together got us wanting to take a closer look at the data for these indicators, and to pull out key findings.

Wages have increased to record highs. But to get a true picture of the real trend in wages. we have to  adjust for inflation, which has been going up dramatically as well. When we do that,  the story begins to shift quickly.  Check out Chart 1 below. Workers in cities like Los Angeles and Dallas win big, as wage growth exceeds that of inflation, which means there is “real” wage growth.  But Atlantans lag behind their peers. The size of the inflation adjustment can be seen as the difference between the gross and real income bars in the graphic.