Overall wage growth outpaced consumer inflation in 2022, with Black Americans, young people and those with the lowest incomes receiving the largest wage increases, according to The Wall Street Journal (subscription).
The trend: Consumer inflation stood at 7.1% in the fourth quarter of 2022—however, with median weekly earnings increasing by 7.4% year-over-year for all workers at the end of 2022, earnings outpaced inflation and led to real gains.
- Workers saw raises this year mainly due to the tight labor market, as companies rushed to retain workers in a period where quit rates were high.
Who saw gains: Growth in wages was especially clear among particular segments of the population:
- Black workers saw the greatest increase in wages, even as white and Asian workers remained better paid than other racial groups.
- Wages for women grew by 5% and men by 6.6%, with women’s weekly earnings equating to 82.9% of men’s.
- Workers aged 16–24 saw the highest increase at 10.8%, although that is not surprising, since that group’s wages start low. Older workers, meanwhile, had the smallest wage growth.
- Workers in the bottom 10% of income levels saw growth of 9.8%, while the top 10% grew 5.7%.
The context: While 2022 saw significant wage increases, especially for low-income workers, these increases are expected to cool off in the coming year.
- “Workers’ ability to continue to receive large pay increases this year is likely under pressure. Economists surveyed by The Wall Street Journal forecast job losses in 2023, after recent strong hiring.”