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  • 2022-03-09 (xsd:date)
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  • No, inflation has not cut Americans’ buying power in half (en)
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  • Consumer prices for everyday goods such as gas, groceries and electricity have surged over the last year. But a Facebook post exaggerates how much inflation has impacted American wages. And just like that, your $15/hr doesn’t buy you as much as $7.50/hr did a year ago, claimed a text-post shared on Facebook . This post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook .) While it’s true that this year’s inflation spike — the highest in 40 years — outpaced increases in wages, this claim vastly overstates how much Americans’ buying power has depreciated since 2021. Over the last two years, a record number of people have left their jobs for better pay and work environments as part of what’s been dubbed the Great Resignation. To compensate for this, employers on average raised wages 5.7% over the last year, the fastest pace since 2007, according to the Department of Labor . However, these pay increases have not kept up with the recent inflation hike. In January, the Labor Department reported that the consumer price index rose 7.5% compared to a year ago. This is the highest inflation rate since 1982, when Ronald Reagan was in his first term as president. When accounting for inflation, real average hourly earnings fell by 1.7% from January 2021 to January 2022, the Labor Department reported in February. With this 7.5% inflation rate, a person who made $7.50 an hour in 2021 would need to earn $8.06 an hour this year in order to have the same buying power they did last year, according to the Labor Department’s CPI inflation calculator . That’s still about $7 less than the Facebook post claims a person would need to earn to have the same buying power. If $7.50 an hour wage last year were now equal to more than $15 an hour, that would mean inflation skyrocketed at a rate of 100%, far above any increase seen in U.S. history. Our ruling A Facebook post claimed: And just like that, your $15/hr doesn’t buy you as much as $7.50/hr did a year ago. Inflation rose 7.5% over the last year, a 40-year high but still far below what the claim suggests. A person would need to earn just over $8 an hour — not more than $15 an hour — to have the same buying power as a $7.50 hourly wage in 2021. We rate this claim False. RELATED: Mitt Romney jab over 7% inflation ignores rising wages RELATED: Biden’s boast about rising wages ignores effect of inflation (en)
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