Keystone Today

With the inflation rate sitting at a 40-year high of 9.1%, Americans are witnessing the sharpest real wage decline in several decades. 

Despite the strong job market, typical workers in Pennsylvania and across the nation have become financially worse off with each passing month for more than a year. In conjunction with that, consumer sentiment is tanking.

"REAL (inflation-adjusted) hourly earnings DECLINED at the steepest in four decades in June," Joel Griffith, a research fellow and economist, said on Twitter Thursday. "For a couple earning $100,000 last year, this is a $3600 pay cut in 2022." 

Griffith’s tweet followed the July 13 release of data from the U.S. Bureau of Labor Statistics (BLS) that showed real average hourly earnings decreased 3.6%, seasonally adjusted, from June 2021 to June 2022; and it also decreased 1% from May to June. 

On the same day, the BLS also released the Consumer Price Index (CPI) data for the 12 months ending June 2022. The data showed a 9.1% all items annual increase, a new four-decade high. The three largest contributors were the increase in the indexes for gasoline, food and shelter. 

After subtracting CPI inflation, the average pay for non-managerial workers was down 2.7% over the past 12 months, Axios reported. That is the steepest drop since 1980 (except for a single month at the start of the pandemic, when data was distorted). 

Average hourly earnings, by pure numbers, for private-sector workers are up 2.2% since December 2021, which would typically be ideal for a six-month period; Axios said. But that increase was more than offset by consumer prices that rose 5.4% in that same span. 

Consumer sentiment for June, meanwhile, came in at an all-time low; the University of Michigan's Surveys of Consumers said. June saw a -41.5% year-over-year change in the Index of Consumer Sentiment. The index also saw a -14.4% change from May to June. 

President Joe Biden’s leadership has been under fire for months, and many Americans don’t approve of his job performance; a New York Times report said. The latest New York Times/Siena College poll revealed the president's approval rating is at 33% among Americans. It also showed more than three-quarters of registered voters think the United States is moving in the wrong direction. With those numbers, the Times report commented that the "pessimism spans every corner of the country, every age range and racial group, cities, suburbs and rural areas, as well as both political parties.” 

The average household income in Pennsylvania is $84,849, data from World Population Review said. When adjusted for inflation, this number drops by $3,054 to bring the annual income to $81,795.