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Snapshot for April 20, 2005.
Price growth outpaces wages for the 11th consecutive month
Today’s release of the consumer price index (CPI) data for March confirms that real wages continue to deteriorate for many U.S. workers. The inflation-adjusted hourly wage of the 80% of the workforce employed in blue-collar and non-managerial jobs fell 0.5% over the past year (from March 2004 and March 2005). This marks the 11th consecutive month wherein annual wage growth failed to outpace inflation.
Today’s CPI report allows us to examine the progress of wage growth four years out from the recession that began in March of 2001. Since then, real hourly wages have gone up by 1% in total, an annual rate of 0.2%. Real weekly wages, which reflect the diminished hours of work over much of this period, were flat, down 0.2% over the four-year period.
Note that productivity grew 16% over this period at an annual rate of 4.1% (2001q1-2004q4, the most recent available data), revealing a historically large gap between real wage growth and the productivity of our workforce.
The recovery may be showing up in top-line statistics like GDP and productivity growth, but for working families, it’s nowhere to be seen in their paychecks.
This Snapshot was written by EPI economist Jared Bernstein.