At first glance, it appears that many Americans have received large pay raises since the Covid-19 pandemic it started

But in reality, only the workers two industries – leisure and hospitality and retail – are coming out ahead, once inflation is taken into account.

In general, wages and salaries of private sector workers rose by 4.2% between December 2019 and last June, before factoring in price increases, according to an analysis of quarterly Employment Cost Index data by Harvard University economics professor Jason Furman.

However, Once inflation is taken into account, paychecks actually decreased by 1.2% during that time period, according to the analysis.

US consumer prices rose 9.1% year-on-year in June, the highest level in more than 40 years, according to the Bureau of Labor Statistics.

“Workers have had more bargaining power for higher wages, but businesses have also had power to set higher prices,” said Furman, also a former chairman of the Council of Economic Advisers in the Obama administration. “And prices are outpacing wages.”

Leisure and hospitality workers, which include waiters, cooks and hotel clerks, have been in high demand after being hit hard by job losses when non-essential businesses closed at the start of the pandemic. Their wages have grown 0.9% since December 2019, after accounting for inflation, according to Furman’s analysis.

Although the global economy has now recovered all the jobs it lost during the pandemic, the leisure and hospitality sector is still 1.2 million jobs, or 7.1 percent, below its February 2020 level , according to the monthly employment report of the Bureau of Labor Statistics, published. friday

Retail workers such as salespeople, cashiers and customer service representatives have also been courted by employers. This led to an inflation-adjusted wage increase of 0.2% for them. Employment in this sector is 208,000 above the February 2020 level.

But even employees in these industries have seen their pay raises eroded this year as inflation continues to climb. Pay increases for leisure and hospitality workers and retailers were 2% and 1.2%, respectively, in the two years ending in December 2021.

Employers in lower-wage industries have actually had to raise wages to hire and retain the staff needed to meet demand in 2021, said Skanda Amarnath, executive director of Employ America, which advocates for a high-wage, high-job economy.

“Right now, the CPI is too strong relative to everything else,” he said of the Consumer Price Index, a popular measure of inflation.

In all other industries, inflation-adjusted wages have fallen since the end of 2019, led by utility workers with a 2.7% decline.

Those employed in construction and information technology saw their payrolls rise 1.8%, while workers in the manufacturing and financial sectors saw a 1.7% drop.

Even wholesale trade workers such as truck drivers, who were also in demand during the pandemic as supply chains snarled, have lost ground. Their wages have decreased by 0.6% since December 2019. This is a step back from the end of 2021, when their wages increased by 0.1% compared to the previous two years.

The Employment Cost Index report is watched closely by the Federal Reserve to monitor the extent to which soaring inflation is pushing up wages. The data helps the Fed determine how much to raise interest rates.

But the Fed looks at wage growth before the impact of inflation, and that has remained strong. The 5.3% jump in the year ended June was the biggest since the spring of 1983.

So despite declining inflation-adjusted wages in most industries, the Fed is expected to continue raising interest rates this year to try to curb rising prices, economists say.

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