CNBC Mocked For Saying That ‘Rising Wages’ Are A ‘Silver Lining’ Of Inflation – JP
CNBC published an article touting the fact that wages “may increase” as a “silver lining” of rampant inflation.
As the outlet reported on Thursday afternoon:
Already, prices on some goods, like cars, are noticeably higher, stoking fears that a sudden uptick in inflation will decrease purchasing power over time. Although consumers may pay more for everyday items, it’s not all bad news as far as household income and spending goes. Companies facing a labor shortage are also paying more to get workers to walk in the door.
Workers already saw a bump in their paychecks for June. As of the latest tally, average hourly earnings rose 0.3% month over month and 3.6% year over year, according to the Labor Department.
Inflation is the erosion of a currency’s purchasing power over time. If, for example, inflation were to remain at 2%, then the value of every dollar — both in new earnings and previous savings — drops in value by 2% over the course of a year. If earners see wage increases that match inflation — in this case, a 2% wage increase — inflation has no meaningful effect on their lives.
However, price levels have increased by 5% since last June. Under the 3.6% year-over-year wage increase reported by CNBC, most Americans are therefore observing a net 1.4% decrease in purchasing power. – READ MORE
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