reader John Confidently assert:
Real average hourly earnings have fallen back to pre-pandemic levels — now at $11.03, compared to $11.02 in February 2020. Real wages will almost certainly continue to fall in the coming months.
This may be true. He did not determine what deflator he was using, whether he was using total headcount or just production/non-supply, or any other information about the source of the data. All I know is that if I use data that I can easily download from FRED (about 20 seconds), and put it into a program to plot a graph, I get the following (using official CPI – all city numbers):
figure 1: Average hourly earnings in the private sector (producing/non-supply), narrowed by CPI (city-wide 1982-84) (black) and 2020M02 average (red). Source: BLS via FRED (AHETPI and CPIAUCSL series), and author’s calculations.
For the sake of comparison, I noticed what happened to wages that are usually interpreted as being at the lower end of the income range.
figure 2: Average hourly earnings (produced/non-supplied) for leisure and hospitality services, narrowed by CPI (city-wide 1982-84) (black) and 2020M02 average (red). Source: BLS by FRED and author’s calculations.
Reminder: early JohnH also confidently asserts that BLS hides median salary data. Conclusion: On average, there is an inverse relationship between reviewer confidence and accuracy.
