Slow Real Wage Growth In The US
🚀 What’s happening: Back in May, real wage growth in the US (i.e. what you earn over inflation) turned positive for the first time in over two years. There is no better measure in our mind how everyday families are doing than looking at how much they are earning vs. the costs of things they need each day; at this time we were becoming more optimistic for better days ahead.
That positive trend is now continuing as this past week we saw real wage growth for October come in at +4.1% down from the +4.3% growth in September and +4.3% growth in August (see the chart below. For anyone that hates numbers and charts, the two lines getting closer on the right hand side tell the story).
While this is all nice, it’s the first time since the start of the pandemic that we have seen wage growth start to consistently outpace inflation.
👪 Closer to home: While on the whole the economy still remains strong and this does not mean that recession is around the corner (don’t let traditional media frighten you!), we are a bit more pessimistic on real wage growth getting much better in the near term.
We think the economy and the job market will continue to cool (giving employers more power to not have to raise wages) and with some of these upward pressures to inflation above we have a hard time seeing the CPI move much below 3% in the near term.
While experts will tell you to save and cut back more as a way to combat a lack of real wage growth (we do have a free budget template here for those who want to go this way), we prefer to try to help you find more ways to increase your earnings power.
Here are some tips:
Be savvy looking for a new job. If you are less than 100% happy at your current role and are considering looking for a new job, there are still potential opportunities with higher salaries if you search smart. We recently came across this new free APP called Fishbowl that posts specific salary metrics for roles at various companies from anonymous sources, as well as advice from a community of people in a similar situation (we have no affiliation with them, just liked the service).
Negotiate a raise. This one can be tough and intimidating but if you think you are overdue a raise, now is the time to craft your argument. We created a quick 5 step guide to help and are always here if you need us to give you a little positive pep talk!
Earn extra income. You can always look to boost your overall earning power by taking on a little extra work outside your day job. To help we came up with 20 suggestions For earning some extra income without having a lot of free time.
