What’s more, today’s high inflation is eating away at what increases workers are able to enjoy, the left-leaning institution says.
“That’s the other complicating factor,” Halbert said. “Inflation is really zeroing out these wage gains.”
Relying on federal data, Policy Matters shows that two of the area’s most common occupations — home health care/personal care aides and general/operations managers — saw wages fall since 2019.
The fastest pay growth since 2019 among local jobs went to registered nurses (whose pay rose $1.75) and retail salespeople ($1.81).
It’s a similar story nationally. Since December 2020, nominal wages and salaries were up 4.5%, marking the fastest increase since 1983, according to a Peterson Institute of International Economics report in January 2022.
Those national increases put nominal wages and salaries 1.2% above their pre-pandemic trend, the institute said in a report by Jason Furman and Wilson Powell III.
But again, inflation is stealing those gains.
Jeff Haymond, dean of Cedarville University’s School of Business, said real wages have fallen for nine or 10 months.
“When I say ‘real,’ I mean adjusted for inflation,” he said.
That means less purchasing power, even if the numbers on paychecks are higher. And that phenomenon is affecting less affluent people in particular, Haymond said.
Even at relatively higher wages, employers are still desperate for qualified employees. A Labor Department survey last week showed a record number of job openings, 11.5 million.
Halbert’s policy recommendations are familiar ones: Put recent wage increases as the “floor” in law, with a higher minimum wage, indexed to inflation, she advises.
Said Halbert: “Being an entrepreneur or a business owner doesn’t entitle you to make a profit on the backs of working people. If the key ingredient to making your business work is poverty-level wages, I think we need to take a look at that business model.”
During COVID, the labor market changed. Eight of the 10 most common pre-COVID occupations shed jobs, particularly at restaurants and hotels.
And that’s reflected in a reshuffling of occupations in the top 10, Halbert said. Some fell off the list, like waiters and waitresses, which rank at 15 today. In 2019, that occupation was at No. 9.
Nam Vu, Miami University economics professor, agrees that inflation is important to consider when it comes to wage growth.
“The wages that we have today are pretty much outdated,” Vu said. “Actually, when you have high inflation, wage growth can be negative. And that’s something we’re seeing right now.”
In Ohio, the problem is particularly acute when it comes to hospitality and restaurant workers, and even some manufacturing workers, he said.
He believes current inflation could well be long-lasting, feeding a self-fulfilling “expectation” of higher prices, “which means we could have a persistently negative wage growth,” he said.
“It is a very tricky situation. It very much reminds me of the (19)70s, and there’s no easy answer to that,” Vu said.