The Raise That Wasn't
Average hourly earnings have risen roughly 18-20% since 2020. Sounds great on paper. But cumulative inflation over the same period is about 22%. For the median worker, real wages — what your paycheck actually buys — have been essentially flat or slightly negative over five years. The 'raise' was consumed by higher prices.
The picture varies dramatically by income level and sector. Low-wage workers (bottom 25%) actually saw the fastest nominal wage growth, driven by minimum wage increases and labor shortages in hospitality, retail, and food service. Many went from $10-12/hour to $15-17/hour. After inflation, they're modestly ahead — but still struggling because the categories that consume most of their budget (housing, food, transportation) inflated the fastest.
The Middle-Class Squeeze
Middle-income workers ($45,000-$85,000) are the most squeezed. Their raises have averaged 3-4% annually — roughly matching inflation but not exceeding it. Meanwhile, the costs they can't avoid (housing, insurance, childcare) have outpaced their income growth. A household earning $70,000 has roughly the same purchasing power as a household earning $57,000 did in 2019.
High-income workers and those in tech, finance, and healthcare have generally kept pace or pulled ahead. The inflation experience is deeply unequal — the same 22% CPI increase hits very differently depending on whether housing is 25% or 45% of your budget.