The Sconi

Private sector employees are making more in pay and benefits but what they're bringing home isn't keeping up with inflation, the Wall Street Journal's editorial board opined late last month.

That's called an "inflation tax," the dark lining behind positive reports from the U.S. Department of Labor that worker compensation grew at record-breaking pace during the first quarter, the editorial board reported April 29.

"That sounds better than it is, however, because inflation has erased the purchasing power of those raises," the opinion piece said. "Inflation-adjusted private wages and salaries fell 3.3% for the 12 months through March, and inflation-adjusted benefits fell 4%. Employees are making more but they can buy fewer goods and services with it. This is what economists mean when they call inflation a tax."

The editorial board's observations came about two weeks after the Labor department reported that private sector workers' pay rose 5% in the 12 months through March and that benefits were up 4.1%.

Numbers issued by the U.S. Commerce Department the same day as the opinion piece told a different story. That report found that real personal disposable income fell 0.4% in March, the latest fall in five of the previous six months.

"To put that in dollar terms, in April 2021 disposable income per capita was $48,641 in 2012 chained dollars," the opinion piece said. "In March this year, that amount had fallen to $45,997 - a decline of $2,644. Ouch."

Inflation is behind the increasing need reported by Wisconsin's food banks, forcing them to rethink how they use their ever-stretched resources and funds to meet that need. At least one store in a chain owned by a private employer, the nation's largest, is making an effort to help. The Walmart in Tomah has been partnering with Feeding America in an effort to fight hunger.

"When you buy a participating item or donate, in-store or online, you're helping to secure a meal for people facing hunger at your local Tomah food bank," the Tomah store said in an announcement posted to Facebook April 26.

Another place Wisconsin residents are most feeling that inflation tax is at the gas pump, though it's not so painful in the Badger state than it is nationally, according to statistics from AAA. The current national average price is $4.33 per gallon, 22 cents higher than the $4.11 per gallon reported in Wisconsin but still painful compared to the $2.85 per gallon average that state residents were paying last year.

The year-to-year comparison prompted the Wall Street Journal's editorial board to recall a question the late President Ronald Reagan asked during his, eventually successful, run against former Vice President Walter Mondale in 1984.

"To adapt Ronald Reagan, are you better off than you were a year ago?" the editorial asked.

The editorial did not mention the quip by President Bill Clinton's campaign advisor James Carville in 1992: "It's the economy, stupid."