Workers wages are not rising to meet the growing cost of consumer goods.
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With unemployment going to just 4 percent, there is some backlash. No, you are not crazy, and yes everything is more expensive. Amazon, McDonald’s, Chipotle and other popular brands are slowly increasing their prices. Since the population has more money to spend, suppliers can raise prices to meet the demand. However, the unemployment rate is misleading in terms of how well the economy is doing. More people are being hired yes, but at lower wages that barely allow them to afford the general cost of living.

A paradox

There is celebration since the unemployment rate is historically low at 4 percent, meaning more people are employed. However, rejoicing is slightly contradictory. Just because more people have jobs does not mean the country is doing well. Wages are barely rising and cannot compete with the expensive costs of living. Goods are being raised with the thought that more people have more money, but this is not true. Consumer prices have gone up2.1 percent from last April.

Wages are not growing in America. This action is called pay stagnation. Even though the American economy has been working to help itself, the workers’ wages do not reflect growth. Jobs that require middle-level skills are decreasing, where jobs that require little skill and those that need degrees are increasing. The average pay people are receiving is not able to keep up with the rising costs of living.

Rising costs

Everything is rising in price. Well, almost everything. Gas prices, home costs, and even fast food have gotten pricier. This is all to combat inflation. But 43 percent of families can not even afford to budget all their food, childcare, healthcare, cell phones and other daily costs. Consumer prices are going to keep increasing as long as the U.S. economy gets stronger.

Takeaway

It is misleading to say the U.S. is booming. Yes, the unemployment rate has decreased, which, on the surface level, seems to be positive. But it is harming families since wages are not being raised to meet the cost of goods. It has gotten so bad that about 51 million families cannot afford to live comfortably. The Federal Reserve is also raising interest rates. Wages need to reflect the rising cost of living for people to truly benefit from a low unemployment rate.

 

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Posted 06.14.2018 - 11:00 am EDT