Sticky wage norms and the real wage cost of unexpected inflation

The other interesting finding here is that only 57% of these "job stayers" beat or matched inflation, while 43% suffered a real wage cut. A huge chunk of the people who's wages beat inflation only did so due to job hopping

Would love to see this calculated in high cost of living areas (NY, CA), pretty sure some people have seen 20% wage declines since covid (in terms of how far your income goes)

What 2021-2024?

Check the prices of the flagship 1975 Ferrari, the flagship 1975 Hasselblad camera, or, I don't know, a 1975 Cessna 182 in reference to median 1975 household income.

Then check it again for 2026.

Oh, but we have GPS, Amazon Prime, and doomscrolling now.

Thanks, I'd rather take the Cessna.

I guess RSUs aren't really "real wages" but mine vested over four years to the extent that by the time I left they were worth barely 25% of what they had been when I signed the offer. Happened over time, too, so quarterly vests took a decent hit in that timeframe.

So 63% didn't. I wonder what the average netted out to. Increase or decrease and how much?

The paper only mentions total compensation as: "total compensation (base wages plus bonuses)"

Total compensation includes stock options, stock grants, health insurance premiums, 401k contributions, so-called "employer social security contributions", retirement contributions, time off with pay, etc. Total compensation averages 146% of wages.

This is not a triviality.

The paper doesn't cover this, and so the conclusions don't have merit.

For the Tech sector, inflation speeds up companies crashes as staff leave for startups due to wages being extraordinarily "sticky-up" in large companies.

https://fred.stlouisfed.org/series/LES1252881600Q

> Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over

> 1982-84 CPI Adjusted Dollars, Seasonally Adjusted

> Data measure usual weekly earnings of wage and salary workers. Wage and salary workers are workers who receive wages, salaries, commissions, tips, payment in kind, or piece rates.

Count me in the unlucky 37%. I job hopped for more stability in 2022. I got more comp but then proceeded to get 2% raises. I'm making less now adjusted for inflation than I did in 2022.

This was at the tail end of Covid where a lot of in-person workers were out of a job.

I haven't had a pay raise since about 2021 so yes, that makes sense. Purchasing power is definitely down.

In terms of GB of DRAM it looks even worse.

Title is: Sticky Wage Norms and the Real Wage Cost of Unexpected Inflation

Interactive brief: https://bfidatastudio.org/project/sticky-wage-norms-and-the-...

Who would have guessed printing a bunch of money would be a working class tax

Me for example.

Dot Com 2.0 was 2008-2016

These youngsters talking about 2020s have no idea!

No big surprise- were making mess money and terrified of losing our jobs, afraid of losing healthcare and can’t afford our homes, less social because of doom scrolling

Welcome to the progress and “better world” that Tech Bros promised while they reaped billions of the VC/PE economy

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About fucking time someone called bullshit.

You'll never believe what happened next

LOL

...and the money printer went brrrr

That was bound to happen with the 8-9% inflation we had during the Biden years. 2026 will likely see a similar decline thanks to Trump’s war in Iran.

Tied to immigration levels, more cheap labor, more labor competition, wages go down. Immigrants willing to live 2 to a bedroom, rise in rent prices.

this is just a regular reminder that this is by design.

https://archive.nytimes.com/krugman.blogs.nytimes.com/2010/0...

"in the long run, its really really hard to cut nominal wages. [without] inflation, a significant number of workers take wage cuts"

basically, inflation is a way to cheat all laborers out of their earned wealth so that the management class doesn't have to make hard decisions about who to keep.

During/immediately after a global pandemic? No!