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Harvard economist tells CNN that inflation has wiped out rising wages

We’ve been assured by the brightest minds that inflation is no big deal; in fact, there might even be a silver lining. Check out Reuters’ spin from May: “Consumer prices jumped 0.8%, a larger than expected increase, amid booming demand from a reopening economy.” Paul Krugman assured us not to worry about “transitory price blips.” Robert B. Reich said not to listen to conservatives “screaming” about inflation. And CNBC even wrote a piece about inflation having a silver lining: higher salaries — although “it’s not certain rising wages will be enough to outpace inflation.”

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That was June, and now, in August, CNN is reporting that no, rising wages are not enough to outpace inflation.

Tami Luhby reports:

Not counting inflation, compensation rose 2.8% between March and June, despite the relatively high unemployment rate — a trend that reflects the tight labor market. Job openings are at record-high levels, according to the Bureau of Labor Statistics.

But at the same time, prices are soaring. Gas costs more. Food is more expensive. Car prices are at record levels.

The consumer price index rose 0.9% in June and 5.4% over the past 12 months — the largest jumps for each since mid-2008, according to federal data.

“In fact, compensation is now lower than it was in December 2019, when adjusted for inflation,” according to a Harvard economist.

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Don’t worry, though; President Biden said during a CNN town hall that those multi-trillion-dollar spending bills will “reduce inflation, reduce inflation, reduce inflation.” It’s so true he said it three times to make sure everyone believed him.


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