Over the past few years, median wages have increased by 24%, outpacing the inflation rate by 2.3%. Blue-collar workers have seen their earnings rise by 3.8%, while white-collar professionals experienced a slower growth rate of 1.6%. This increase in wages has improved the purchasing power of the average American worker, although not everyone has felt the benefits.
Consumer confidence remains below pre-pandemic levels, indicating a disconnect between the solid economy and public perceptions. The inflation rate has slowed, prompting debate over its causes, with supply chain disruptions during the pandemic being a major factor. Despite rising prices, foreclosures and bankruptcies have not surpassed pre-pandemic levels, and unemployment remains low.
The Federal Reserve is expected to lower interest rates soon due to the economy’s stability, as evidenced by the high corporate profits and stock market indexes. Economists attribute the rise in wages to state minimum wage increases and economic policies maintaining near full employment.
While there is room for wages to increase further, companies could afford to pay their workers better, as labor’s share of business income remains at record lows. Progressive policies such as banning price gouging on groceries have been proposed to ensure that workers can benefit from economic growth and not just corporations.
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