My most recent Washington Post column offers a theory for the alleged puzzle of Americans’ sour attitude toward an economy that features falling unemployment and inflation. My simple explanation:
Wages haven’t kept up with prices. Average wages are down in real terms — adjusted, that is, for inflation — since President Biden took office. They are roughly 3 percent lower than their peak in April 2020.
I added that real wages are about 2 percent lower than what they would be if the pre-pandemic trend had continued.
Since that article posted early Friday morning, the government has released numbers for September — and the wage trend I mentioned has gotten worse. There has been a 3.4 percent decline since April 2020, and real wages are down 2.1 percent compared to the pre-pandemic trend.
A lot of paychecks aren’t going as far as they used to. It’s not shocking that people are unhappy about that.