by Martin Armstrong
Armstrong Economics
Wages in America have been unable to keep up with inflation. A new report by the Atlanta Fed found that 40% of America’s workforce now earns less than the inflation-adjusted cost of living, which is primarily affecting the lowest earners. Wages outpace inflation in thriving economic conditions, but we are amid a wave of stagflation.
The Wage Tracker data found that 57% of the US workforce experienced pay increases that did outpace the cost of living, but the remaining 43% are facing a decline or stagnation in lifestyle. Nominal wage growth was 3.4% from June 2024 to June 2025 while inflation was 2.7% for that same period, meaning that pay has outpaced inflation by a mere 0.7 percentage points. Last month, the three-month average annual growth in the Atlanta Fed Tracker was 4.2% or 1.5 percentage points above CPI. Real wage growth adjusted for inflation was around 0.7%, adding about $9 per week extra for the average American.