Inflation Cuts into Wage Gains
Driven by labor shortages, median hourly wages increased at an annual rate of 5.2% in December 2021, the highest level since June 2001. However, inflation cuts into buying power, and real wages — adjusted for inflation — actually dropped as inflation spiked in 2021. By contrast, negative inflation (deflation) during the Great Recession sent real wages skyrocketing temporarily even as non-adjusted wage growth declined.
Also in this issue:
- ETFs Are Gaining on Mutual Funds: Here's Why
- Key Retirement and Tax Numbers for 2022
- Splurge or Save? Making the Most of Your Income Tax Refund