COMP NEWS – Over the last year, nominal wages have increased as companies compete for talent amidst the great recession. However, inflation has increased more rapidly amounting to an observation of real wages decreasing in all industries except for leisure and hospitality.

But the data shows that the wage gains, while significant, have been no match for inflation over the last year. Wages have not kept up with inflation in all but one industry: leisure and hospitality.

Starting from a lower base, hourly wages for leisure and hospitality workers have jumped 11.8% from a year ago as restaurants and hotels have struggled to attract employees. In March 2021, the average hourly earning in the industry stood at $17.60 but jumped to $19.68 last month.

While real wages are down, rates of unemployment have decreased due to a hot job market and rapid economic growth.

The economy has added almost 8 million jobs since Biden’s inauguration, and the unemployment rate currently sits at 3.6%, down from 6.4% when he took office. But inflation and the falling buying power threatens the administration’s economic case and the Democrats’ prospects in the upcoming election.

Yet, inflation has had an overwhelmingly negative impact on public perception, as a recent poll showed that many respondents believe that the country has lost jobs, rather than gained them.

The public perceptions have even grown so disconnected that one poll recently found that a plurality of respondents (37%) falsely think jobs have been lost in the last year compared to the 28% of respondents who got the right answer. In the same poll, there was no such confusion on inflation: 94% of respondents were concerned that prices will climb more in the coming months. The poll was conducted by Navigator research of 1,770 Americans and had a margin of error of 2.6%.

To read more about the inflation outpacing wage growth, click here.

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