After considering Inflation, are American workers really prospering?

It's no secret that the pandemic has created a tight labor market in the US, in order to attract more workers, employers have used a multitude of tactics starting from increasing base pay to paying for tuition. The hourly earnings of an American worker have increased by 5% compared to last year. 

Having said that, another byproduct of the pandemic, the other side of this coin we can say is the increase in prices. Inflation has soared through the roof along with the increase in wages, this acts as a mitigating factor eliminating all the gains of increased hourly wages. According to the latest reports by the Bureau of Labor Statistics, if we calculate the "real wages" of workers that is, taking into consideration inflation then the earnings have actually decreased by 1.2% from October 2020 to October 2021. This takes into account the actual purchasing power of an average US worker, which shows that they are worse off now than a year ago with consumer prices increasing 6.2% in October. Experts say that this is the steepest rise in 30 years. 

Experts like Liz Wilke, principal economist at Gusto draws a parallel between The Great resignation and Inflation. The increase in prices is not pertaining to luxury items but basic necessities like gas, food, and groceries, this means that a worker cannot avoid being a victim of price rise even if they wanted to. In order to combat these people are taking drastic steps like quitting their job to start their own business or care for children or in general look for higher-paying alternatives. This phenomenon in turn caused what we know as The Great Resignation. 

Source: CBS News