Chart of the Day: Inflation Keeps Going Up, But Wages Are Going Down

Inflation in July rose 2.9 percent, its highest level in seven years. Core inflation, which doesn’t include food and energy, rose 2.33 percent, its highest level in ten years.

This is not cause for panic, but there’s unquestionably some acceleration in the inflation numbers now. This means two things. First, the Fed is now more likely to tap on the brakes a little harder, which will cause the economy to slow down. Second, since employers seem to have no intention of ever raising nominal wages more than about 2 percent, the real earnings of blue-collar workers are going to continue to fall behind. Here this is in chart form:

No matter what the inflation level is, employers raise wages between 2-2.5 percent. They seem to be stuck on this as a “reasonable” number after experiencing years of the great moderation during the 90s and aughts. But as inflation goes up, this means that workers are getting no real wage increases at all. Or, even worse, they’re getting effective pay cuts, as they did in June and July.

Think about this. The economy is growing at its fastest rate in years. Unemployment is below 4 percent, its lowest point in years. Corporate profits are breaking records. By any normal measure, this is a very high-pressure economy. And yet blue-collar workers have gotten a pay cut over the past two months. Anyone care to explain that?

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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