Real Wage Growth at the Micro Level

Gregory, Victoria; Harding, Elisabeth

doi:10.20955/r.106.87-105

Journal Article

Real Wage Growth at the Micro Level

Abstract: This article investigates patterns in real wage growth in 2022 to determine whether wages have kept up with rising price levels and how this differs among labor market participants. Using the consumer price index for wages and imputing expenditure data from the Consumer Expenditure Survey, we separately measure nominal wage growth and inflation rates at the micro level. We find that there is more heterogeneity in the former, meaning that when we combine them, an individual's real wage growth is primarily driven by their nominal wage growth. In 2022, 57 percent of individuals experienced negative real wage growth, with older and less-educated workers, as well as job stayers, being hit the hardest. Conversely, younger and highly educated workers, as well as job switchers, had higher real wage growth.

Keywords: inflation; real wage growth; nominal wage growth; macroeconomics; labor; consumption;

JEL Classification: E24; E31; J31;

https://doi.org/10.20955/r.106.87-105