Only an Organized Workers’ Movement Can Force a Rational Response to Inflation
To address the cost-of-living crisis, we need to expand production and rein in corporate profits. Only Congress and the White House have the tools for the job — but they won’t use them unless labor organizes to force their hands.
The Fed’s explicit strategy for combating inflation is to prevent workers’ wages from catching up with higher prices. (PATRICK T. FALLON / AFP via Getty Images)
Wages are not keeping up with rising prices.
After a bump in wages in the first year of the pandemic, prices began rising in early 2021. This past summer, the price level caught up. In June 2022, average weekly earnings for employees in the private sector fell below their real pre-pandemic level of February 2020. In October, wages were about 2.5 percent below their pre-pandemic trend, which means the average nonsupervisory worker, whose weekly take-home pay was $900 in September, would have needed about $27 more each week to earn the same purchasing power as before the pandemic.
These numbers are small, but they show who is bearing the burden of adjustment to the rise in consumer prices: workers.
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