The Sconi

In Wisconsin, wages are not keeping pace with the national average when inflation is added to the equation.

Jason Furman, former Obama chairman of the Council of Economic Advisers, and current Harvard economist, said inflation has eaten up all of the wage gains for Americans going back to the Trump administration. In June 2021, real compensation fell 0.7% below the levels of December 2019, and 2% lower than its pre-pandemic trend, according to the Peterson Institute for International Economics. 

According to the U.S. Bureau of Labor Statistics, nominal compensation for all U.S. civilians has risen by a 2.8% annual rate. At the same time, because of inflated prices, real compensation is down by 2% since before the COVID-19 crisis began. 

Inflation has risen dramatically compared to pre-COVID levels, with the consumer price index rising at a 10% annual rate. In all sectors aside from leisure and hospitality, real compensation has fallen below trend levels, according to the Peterson Institute. 

Wages in Wisconsin have failed to keep pace with the national average, rising by 5.3% compared to 7.4% nationally. Wisconsin ranks 43rd of 50 states in this metric. This also fails to keep up with inflation, so Wisconsinites have seen a substantially greater increase in prices than in wages, according to the U.S. Bureau of Labor Statistics. 

The real compensation depends on a variety of factors, according to the Peterson Institute for International Economics, including, “(i) the tightness of labor markets, which are likely to experience increases in both labor demand and labor supply over the next six months (although not necessarily monotonically given the rise of the delta variant); (ii) whether employers adjust compensation growth up to reflect the higher inflation, something that was standard in contracts and bargaining in earlier periods of high inflation but has largely been absent for several decades; and (iii) the outlook for inflation, in particular, whether it persists well above the historical expectation of 2% annual growth.”

Authors of the initial $1 trillion infrastructure bill, including majority leader Chuck Schumer and other Senate Democrats, claimed the bill would be "fully paid for." The nonpartisan Congressional Budget Office (CBO) has since shattered those claims, finding that the $1 trillion installment of the infrastructure plan would add $256 billion to the federal deficit over 10 years, according to the Wall Street Journal. 

The consequence is increased costs of living everywhere for Americans. The Bureau of Labor Statistics’ Consumer Price Index (CPI) reported notable upticks over the past 12 months on items particularly important to average American households: Food (+3.4%), energy (+23.8%) and used vehicles (+41.7%), according to the Bureau of Labor Statistics.