America’s Cost-of-Living Crisis Is Really a Pay Crisis

Time ^ | Apr10, 2026 | Arindrajit Dube

[anthropocene_x]

Over the past 45 years, wage growth for most Americans has been halting at best, often failing to keep up with the country’s overall economic gains.

The issue underpinning America’s cost-of-living crisis isn’t just rising prices. The real culprit behind America’s affordability crisis is that employers have had too much power and too little motivation to share gains.

The consequences of this imbalance are clear. The economy’s productivity grew by around 73% between 1979 and 2019, but wages in the middle rose only about 23%. Here is what this means in concrete terms. A retail worker in 1979 earned about $14.60 in today’s dollars. By 2019, that pay had risen to $17.40: only a 19% gain in an economy that nearly doubled in size. At the same time, earnings for the top 1% soared 169%. We had real economic gains, but much of it did not go to typical workers in this country.

This gap did not come about by accident. It was a consequence of corporate strategies that privileged shareholder returns over worker pay. It was also aided by the erosion of safeguards against corporate power, such as labor unions, and by policy choices that let the minimum wage wither.

The good news is that we have also had a glimpse of how we can do better. During the tight labor markets of 2021–2023, wages at the bottom grew faster than at the top, reversing roughly one-third of the inequality that had built up since the late 1970s. As workers left low-paying jobs for better opportunities, it increased competition, putting pressure on those employers to raise pay. And as workers moved to better positions, this also increased the overall productivity in the economy…a double dividend.

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TOPICS: Business/Economy
KEYWORDS: demagogicparty; economy; illegals; jobs; leftistsource; openborders; socialism

[Texas Eagle]

It’s a waste, fraud and abuse crisis. People are having money taken from them in a supposed effort to solve this or that problem but the money is “disappeared” and taxes are raised again to solve the same problem the first batch of taxes was supposed to solve but that money is also disappeared so taxes are raised again to solve......

[dpetty121263]

Called devaluation of the US Dollar...

[Myrddin]

It's simple math. An employee must produce equal or greater value to the business than the compensation paid for that labor. If not, the employer loses money. The only reason to hire is when you have more business than the current employees can service and customers are walking away for lack of service or product. Concurrently, you can't charge more for your goods or services than a competitor on pain of losing customers based on price. The Laffer Curve applies to pricing too.

[ProgressingAmerica]

It is none of the above.

We have a minimum wage crisis.

Jobs which actually only carry a true value/worth of five dollar an hour are artificially being forced by government to be paid seventeen dollars an hour.

Everybody is paid too much.

Just wait until the pay bubble bursts, oh goodie won’t that one be fun.

[Myrddin]

You must also pay your employees enough to avoid having them leave for greener pastures. A tight labor market is good for employees. There is competition to hire and retain good ones. One the flip side, having an excess of employees seeking the same work removes the incentive for higher pay. There is always someone eager to replace an unhappy employee.

[NetAddicted]

I keep hearing Americans are blaming their pay problems on government fraud. Oh, and the young want socialism.

[rellic]

The real problem is this:
If a worker costs more than an
alternative,
I’d go with an alternative.
Alternatives don’t vote, join unions,
and other such things that make the
worker a pain in the butt.

[jimpick]

“”””The good news is that we have also had a glimpse of how we can do better. During the tight labor markets of 2021–2023, wages at the bottom grew faster than at the top,”””

Time is so close and yet does not see it. Sending our manufacturing overseas while importing a massive amount of people increased the labor poll size that was competing for fewer jobs. The problem is not enough jobs and to many workers.

[PGR88]

[yesthatjallen]

Here is the famous chart. Search Wages vs. Productivity.

[FirstFlaBn]

The most productive have shifted to non-hourly jobs, taking the gains with them. Productivity growth is all that counts. We bought more housing, more medical benefits, and more environmental “protection” than we could afford. We made popcorn out of the seed corn. It was fun while it lasted.

[alexander_busek]

Called devaluation of the US Dollar...

A retail worker in 1979 earned about $14.60 in today’s dollars.

The article explicitly adjusts all dollar figures for inflation.

So how can there be a "cost-of-living" crisis if today's workers actually earn more per hour than the average worker in 1979?!

Regards,

[Manuel OKelley]

Financially that makes sense

When people are struggling to survive in ten years don’t blame them when they cut off social security and Medicare for everyone over a certain age

It’s coming

[ridesthemiles]

TOTAL BS

THE MORE WORKERS DEMAND, THE HIGHER THE COST OF EVERYTHING FOR EVERYONE.

[ridesthemiles]

MORE EMPLOYEES WITH LESS SKILLS & EVEN LESS INDUSTRIOUS ATTITUDES IS AN EVEN LARGER PROBLEM.

[piasa]

It’s a government spending crisis.

Too much socialism, too much regulation, too much litigation, killing the middle class and small businesses and family farms.

[cherry]

It’s not a pay issue....its a greed issue...capitalism should correct this but since we have crony captalism.nothing happens as it should.

[MMusson]

And the importation of Cheap Foreign Labor.

Wages for everyone from construction workers to Data Base Analysts are depressed by legal and illegal immigrants.

[caddie]

Yes I think productivity has increased massively in the past 30 years. Lots is due to computing, lots is due to people teaching themselves computing at no cost to the employer. Lots is due to people spending much more time at work and working on their free time uncompensated. Lots of it is moms thinking it is cool to work in an office and drop their kids off at a daycare rather than to get and stay married and raise their children at home to be responsible adults.

Instead of all this increased productivity being plowed back into the working person's standard of living, and a comfortable retirement and to his heirs, it has been either squandered or prevented from accumulating by:

1.) Astronomical government spending on the most outrageous things in unfathomable quantities, not attaching our currency to something like gold or silver, just printing it ad libitum, and NEVER balancing a budget as a matter of governmental pride and defiance of the people. Financing our national debt by borrowing from our mortal enemies.

2.) Letting everyone in the world come here without any requirements for work or good citizenship; their only requirement being a sniveling contempt for white America and Americans, and a craven, freeloader's opportunism and willingness to sell their votes as multigenerational Rats for guarantees of perpetual support of all kinds, while simultaneously agreeing to have limitless offspring to be cared for by the Welfare State and to bring over every foreign relative who can be identified.

3.) Next, irresponsibly overpaying people at the tops of corporations (managers, boards). Overpaying star athletes, actors, other vanities, executives, news-reading clowns and raconteurs, etc., in an odd tulip-bulb frenzy. Multiple positive feedback loops encouraging ridiculously high salaries for some that contributes to inflation.

4.) Blocking the formation of a liquid middle- and lower-wage labor market by a ridiculous minimum wage, erasing entry level work opportunities for minors, continuous flooding with immigrants who demand floor-bottom wages and exploiting them in contravention of immigration laws, and

5.) Discouraging and eroding savings by having a Clown Token Social Security Administration left after its raiding by LBJ, having outrageous taxes on property and capital gains, and

6.) Making up reams and volumes and whole shelves of regulations for businesses as simple as lemonade stands so that no one can start a business. And no one can move from a crappy job to a good one, which keeps employers from acting right.

7.) Raise an electorate in a Pinhead Clown Babysitting and Communist Indoctrination Educational Establishment to think that all of the above is normal and laudable, and you are where we are today.

Please let me know if I have left anything out in the above rant.

About half of this waywardness is due to the government, the other half is due to people disobeying the Golden Rule or the Second Greatest Commandment. A moral society would correct itself in all these errors, slowly but surely.