Among the various ways of estimating worker pay, one of the most accurate is the BLS calculation of employer costs. This is released quarterly, and in Q4 of 2023 wages and salaries for civilian workers increased by a whopping 10%:
From Q3 to Q4, wages increased 3.1%. Adjusting for inflation and then annualizing the quarterly change produces a 10% increase on an annualized basis.
Total compensation, including benefits, was up 11.2% on the same basis.
This is.......a little hard to take in. Unless I slipped a digit that's a huge increase, and it's way bigger than the increase in the Employer Cost Index over the same period (about 1%). I'm not sure what to make of this.
Assuming the 10% figure is accurate/not an error, wage increases will be a significant driver of inflation...
Everyone I know who has not changed jobs or been promoted since COVID is earning less relative to inflation than in 2019. Nobody was coming close to giving inflation-matching raises the last three years for normal job performance.
Wages are up for job hoppers but not those who stayed where they were. Over the long run this has to even out.
I dunno -- weren't we just talking about the big uptick in inflation last month, particularly in services? Sounds like actual wage inflation has finally entered the chat.