Inflation in the US has receded from its 2022 peak. This column uses payroll records from 2016 to 2025 to show that many workers have experienced a lasting reduction in their purchasing power, and argues that the lack of systematic wage indexation in the US is central to this story. When inflation surged, most firms continued to grant familiar raises of 2% to 4%, allowing purchasing power to fall. Once inflation slowed, those raises again produced modest real wage growth but did not compensate workers for what they had already lost.



Source link