According to government data, Americans’ incomes increased slightly in the first month of 2022. However, the increase was overshadowed by rising prices, which grew at the fastest rate in 40 years. Rising energy prices remain a key driver of inflation, and global oil prices have been rising steadily in recent days due to Russia’s invasion of Ukraine, which could destabilize supply.
2.4% income increase
According to a Willis Towers Watson survey, employers in the United States expect to give their employees a 3.4 percent raise on average in 2022. A poll of 1,004 companies conducted between October and November predicted wage growth is faster than actual raises paid in the previous two years, despite labor shortages and high inflation.
Inflation is a criterion, but this is not the only one. According to Lesli Jennings, senior director of work and rewards at Willis Towers Watson, the larger picture is about the race for talent. She added that companies anticipate similar average pay rises across positions, from entry-level to more senior employees, CNBC posted.
People feel price hike than bigger paychecks
Despite solid job growth, polls show that the public believes the US economy is heading in the wrong direction. The primary culprit seems to be inflation, with fears that rapidly rising prices will soon leave people worse off, even those working in jobs where wages are rising.
When both prices and wages are rising, high inflation is likely. Based on data from a trio of top economists, the White House noted last month that average incomes, including what people earned at work and from investments, have outpaced inflation.
According to New York Times, the income distribution’s earnings for the bottom half increased by more than 10%. On the other hand, people tend to feel the pain of rising prices more than they make gains in their paychecks, which they see less frequently.