Paul KrugmanOne thing I've been noticing in my correspondence is how many people think inflation is still running wild; the big deceleration in the 2nd half of 2022 hasn't broken through to public consciousness 1/
Several reasons for this. Too many media reports focus on yoy inflation, so miss the big turn. Traditional core inflation still reflecting rent increases from a year ago. And asymmetric reporting: breathless coverage of rising inflation, disinflation not so much 2/
But anyway, the truth is striking. Here's 3-month "supercore" excluding food energy shelter and used cars: 3/
What about wages? Running hotter than eve of the pandemic. But here's a longer view, using nonsupervisory wages (longer time series) 4/
Gene Cowan 🏳️🌈@pkrugman This is another interesting one. My wages have not budged in years, nor have those of anyone I know. Does this data only apply if one finds a new job?
OpenDNA⚙️@genecowan @pkrugman Looking at sectoral wage increases, few are as high as the reported wage inflation rate. That points to sampling issues.
Assume that restaurant jobs are low wage and IT jobs are high wage, then layoff all the food service workers for lockdowns - the median wage is going to jump rapidly without an increase in wages anywhere. I suspect something similar happened.
But yes: all sectors rose, so you should have seen an increase too.
Paul CzegeLay off the least senior people and you get the same effect?
@PaulCzege @genecowan @pkrugman Exactly right.
If the C-suite works from home while the rank-and-file gets the pink slip, the statistic grows rapidly.
Krugman's chart specifies nonsupervisory wages. So if the median increase is true across industries, not because food service workers lost their jobs and tech workers didn't, then upward movement happens either because workers actually got wage increases, or because industries cut their least senior, lowest earning nonsupervisory workers.
@PaulCzege @genecowan @pkrugman It's not enough for workers to get any wage increase, it must be a large enough wage increase to explain the average wage growth reported. The sectoral tables show it wasn't evenly distributed.
Non-supervisory retail saw a 1.93% increase in weekly earnings in 2022, non-durable manufacturing saw 1.04%. Averaging those in with the relatively large 4.25% seen in hospitality isn't going to get us up to 5% or 8%.