NEW YORK — Hourly wages are increasing and many Americans are getting raises at work, but inflation is moving faster than those raises.
CBS2’s Tim McNicholas got an advance copy of a new survey that shows how most Americans are losing their race with rising costs.
Shopper Romni Sano says he got a modest raise late last year, but it hasn’t come close to keeping up with the rising costs of necessities like groceries.
“I have three kids and, you know, everything is really expensive,” he said. “I used to buy five of those for $1. Now $2 for the same thing and it’s smaller.”
He’s not alone.
Bankrate.com surveyed about 2,500 American workers and 48% of them said they got some kind of raise in the last year, but 55% of the people surveyed said their income hasn’t kept up with rising household costs. Even among the people who got raises, about half said it didn’t match inflation.
“Average hourly earnings are up over 5%. We’d normally be doing backflips over a rate like that, but inflation has been running at a 40-year high,” said Greg McBride, chief financial analyst for Bankrate.com.
That 40-year mark refers to the ’70s and early ’80s, when the inflation rate reached double digits.
The Federal Reserve drastically ramped up interest rates, which eventually brought down costs but caused a short recession.
“Oh, I think this is a different situation,” said New York University economics professor Lawrence J. White.
White says it’s highly unlikely inflation or interest rates will reach those levels, but a recession isn’t out of the question.
“That’s certainly a strong possibly. The hope of everyone is the monetary policy can tighten, that we might see a slight slowing of the economy,” he said.
Shopper Wilson Reyes says he picked up a second job to cover the rising costs.
“Right now, it’s difficult for everybody,” he said.
And those bills just don’t stop.