A recent Pew Research Center study revealed that real wages in America are on the decline, with meager wage growth overpowered by rising inflation — all in all, leaving American workers with the same purchasing power they had back in the 1970s.
Even though the official unemployment rate has been hovering around record lows in recent years, wage growth has stayed stagnant, a new study from Pew Research reveals. In fact, the real average wage, which Pew defines as "the wage after accounting for inflation" has roughly the same purchasing power as it did 40 years ago. And while some workers have seen gains, most of the increases have gone to those who were already the highest-paid.
"In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today."
But viewers of Fox & Friends were treated to a more uplifting, albeit false, narrative surrounding wage growth in the U.S. on Monday morning.
Fox Business host Stuart Varney appeared on Fox & Friends to mislead viewers about economic growth under the Trump administration, claiming that, “wages [and] salaries are going up for the best increase in at least a decade,” and asserting that “if you have a skill that’s in demand … your wages, salaries are going up.”
Calling Varney’s take on American wages an outlier would be an understatement — intentionally or not, he is grossly misrepresenting the actual state of wages for the majority of American workers.
The Pew Research study was not alone in pointing out decades of decline in real wages:
According to The Washington Post, however, any apparent increase in wages is being wiped out by a larger increase in inflation. Once inflation is taken into account, the average U.S. “real wage” is actually decreasing, falling to “$10.76 an hour last month, 2 cents down from where it was a year ago.” In addition to falling wage growth, workers must grapple with “with higher prices giving [them] less buying power than they had last summer,” according to The New York Times. The Times also reported on the concerning disparity between corporate profits and workers’ gains, noting, “Corporate profits have rarely swept up a bigger share of the nation’s wealth, and workers have rarely shared a smaller one.”
Fox viewers might have walked away from Varney’s assertions feeling better about the state of the U.S. economy, but only because they were misled.
Varney’s claim that supposed wage growth is “the best increase in at least a decade” is misleading on two fronts: Average wages have fallen over the past year once inflation is accounted for, and wage growth is increasing at a slower rate than in November 2016, according to the Federal Reserve Bank of Atlanta’s wage growth tracker.