The Minneapolis Fed president Neel Kashkari made this comment yesterday "Wage growth Is too high" for our two percent inflation target. I updated my wage charts to take a close look.

Hourly earnings data from the BLS, real earning deflated by the CPI. 

Wage Notes

• The total private wage series only dates to March of 2006.
• Wage data or production and nonsupervisory workers dates back to 1964.
• The deflator for all workers is the CPI-U (normal published CPI).
•  The deflator for production workers is the CPI-W. 

Adjusted for inflation (a dollar bought much more in 1973 than it does today), wages have barely risen.

In real terms, making $4.05 per hour in February of 1973 would be worth nearly as much as someone making $28.26 today.

That is how much inflation has destroyed the dollar.

"Wage Growth Is Too High" 

As background for this post, please see Minneapolis Fed "Wage Growth Is Too High" for Our Two Percent Inflation Target

Four Kashkari Statements 

• "Wage growth is at a level that it is actually too high to be consistent with our 2 percent inflation target."
• "We would like to avoid a recession but we know we have to get inflation down. Getting inflation down is job one."
• "We would need to get wage growth closer to 3 percent to be consistent to our 2 percent inflation target."
• "I don't know how embedded [wage growth is] but it is our job to make sure that it does not become embedded." 

Nominal Wages Year-Over-Year Percent Change

Wage growth from the BLS, chart by Mish

Year-over-year, wages for all private workers is up 4.43 percent. Wages for production and nonsupervisory workers are up 5.13 percent.

And that is what Kashkari is complaining about. But year-over-year prices are up much more. Here's the result.

Real Wages Year-Over-Year Percent Change 

Percent change in Inflation-adjusted real wages deflated by the CPI.

In real terms, year-over-year wages have fallen for 16 consecutive months, ever since September of 2021. To the worker it feels like this.

Hourly Earnings and Real Hourly Earnings Last 2 Years 

Hourly earnings and real hourly earnings deflated by the CPI, indexed to 1982-1984.

Last Two Years Chart Notes

• In nominal terms the hourly wage rose for all private workers rose from $29.92 to $33.03
• In nominal terms the hourly wage rose for production workers rose from $25.17 to $28.26
• In real terms the hourly wage rose for all private workers rose fell from $11.39 to $10.99
• In real terms the hourly wage rose for all production workers rose fell from $9.81 to $9.58

Kashkari is concerned that workers are making too much. 

This is what the Fed has done with its perpetual policy of trying to create more inflation. 

And now because workers are making too much, it seeks a recession to cure the problem. 

How the Fed Messes With People's Lives From a Mortgage Rate Perspective

For further discussion, please see How the Fed Messes With People's Lives From a Mortgage Rate Perspective

No one ever holds these economic charlatans accountable for the messes they make. 

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