May 21, 2012

Wage Increases Since 1980 versus Inflation

According to the Society for Human Resources Management the average wage increase is expected to be 2.9% in 2012.    On the other hand inflation from April 2011 to April 2012 is up about 2.3% and it was up about 3.2% for the year 2011.

Getting wage data for private industry and the CPI data from the BLS.   We can compare how wages have trended over the past few decades and how wages compare to the inflation rate CPI.

First lets look at how wages versus CPI have trended.

Click chart for full size image.

For the most part the increase in wages has been a little higher than the CPI rate.   Thats a good trend for workers in general.   It means our income has out paced the cost of goods.

Lets look at the difference between wages and inflation.    Here I just plot the annual % wage increase minus the CPI increase.  So any figure >0% means the wages went up faster than inflation for that year.

The positive values are shown in green and the negative amounts in red.   A couple times the wage increase and CPI were equal so the difference was 0% and I show those in black.  Most of the time wages outpaced inflation and the green data points outnumber the red by 22 to 7.

Of course this is just the nation wide average data.   Some industries and professions have fared better than others.   An individual persons wages are not likely to have moved in step with national averages.


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