Now that we have the report on consumer prices for December, let’s take a look at what happened with real wages in 2017.
Consumer prices increased +0.1% in December, and wages for non-managerial workers rose 0.3%, This for that month the average worker earned 0.2% more.
For the year, the nominal wages of non-managerial workers rose 2.4%, while prices increased 2.1%, meaning that for the entire year workers saw a whopping 0.3% increase in real pay:
But because inflation accelerated slightly in the second half of the year, and nominal pay increases slackened, real pay has actually decreased roughly -0.8% since peaking in July, and is barely up at all over the last 24 months.
Next let’s take a look at the real aggregate pay that non-managerial workers earned in 2017. I like this measure because it tells me how much the economy as a whole has delivered to the middle and working class during the economic expansion. Here’s the graph:
For the entire expansion, real aggregate pay has increased ~23%. On a YoY basis, aggregate real payrolls increased about 2.5%, about the average for this expansion: