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Only 18 percent of U.S. workers feel their pay is keeping pace with inflation, according to a Capital One Insights Center poll released earlier this month.
The number drops to 9 percent among households earning less than $25,000. However, 31 percent of high-income earners reported incomes that matched inflation.
However, “higher earners are struggling to pay all their bills at more than twice the rate they were earlier in the pandemic,” the survey reported, with the number more than doubling from 10 percent in April 2020 to 22 percent in February.
Adjusted for inflation, workers earned 0.8 percent less in February than the month before and 2.6 percent less in February than they did a year earlier, the U.S. labor department reported, even though wages rose 5.1 percent over the same 12-month span.
Fifty-seven percent of low-wage earners and almost half of middle-income households see an expected tax refund this year as “very or moderately important to their overall financial health this year.”
Forty-two percent of survey respondents reported coping with inflation by saving less, pulling money out of savings, or taking out a loan.
TREND FORECAST: In “Americans Need $128,000 a Year to Feel Financially Secure” (18 Jan 2022), we noted that as inflation outpaces income, societies will continue to pull apart into two groups, the well-off and those who struggle. The idea that most people will inhabit a comfortable middle class is rapidly becoming quaint.
As people—especially those with education beyond high school—fall further and further behind, pressures will grow for the government to fund items that have become necessities, such as child care and post-secondary education or training. This will be a foundation for new political movements.