Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
Upside of Inequality Oxford Unintended Consequences

AI Summary. Inflation has outstripped wage growth in key private-sector industries including healthcare, finance, and retail for two straight months, largely because of a surge in energy prices driven by the Iran war. Gasoline prices have fallen since an interim US-Iran peace deal but remain nearly $1 a gallon above pre-conflict levels.

Augusta Saraiva and Maya Prakash Bloomberg
Date Posted:

Americans’ real disposable income has declined over the past two months as wage gains were offset by inflation. Bloomberg expects the dynamic to continue, as higher prices in sectors like food and transportation have “not fully materialized.”

Are rising energy prices eroding workers' real wages?

Core argument: Inflation has exceeded wage growth for two straight months in key private-sector industries including healthcare, finance, and retail, according to data compiled by Bloomberg, cutting workers' buying power.

Inflation has outstripped wage growth in key private-sector industries for two straight months, according to data compiled by Bloomberg. The sharp drop in buying power for employees in sectors ranging from healthcare to finance and retail was largely the result of a surge in energy prices driven by the Iran war, but the dynamic is likely to stick even as gasoline gets cheaper. Gas prices, which have dropped since the US and Iran agreed to an interim peace deal, are still almost $1 a gallon higher on average than they were before the conflict started at the end of February, based on American Automobile Association data. But war-driven inflation in other parts of the economy, like food and transportation, has yet to fully materialize.

Takeaways by Macro Roundup® AI

  1. Inflation has exceeded wage growth for two straight months in key private-sector industries including healthcare, finance, and retail, according to data compiled by Bloomberg, cutting workers' buying power.
  2. Gasoline prices remain nearly $1 a gallon above their average level before the Iran war began at the end of February, based on American Automobile Association data, despite falling since the US-Iran interim peace deal.
  3. War-driven inflation in food and transportation has yet to fully materialize, and the erosion of buying power is likely to stick even as gasoline gets cheaper.

Related Articles:

  • The Record Divide Between Corporate Profits and Worker Pay — Labor's share of gross domestic income fell to 51%, the lowest since records began in 1947, while profits' share rose to 12.1%, the highest since 1950. Inflation-adjusted hourly wages are up 3% since the end of 2019, compared with a 50% rise in profits.
  • US Consumer Sentiment Picks Up on Easing Gasoline Prices — US consumer sentiment rose for the first time in four months as lower gasoline prices offered some relief from a surge in inflation, with the University of Michigan's preliminary sentiment index increasing to 48.9 from a record low of 44.8. The reading beat most economists' expectations but remains the second lowest in data going back to the 1970s.
  • Do Voters Punish Inflation or Pay Cuts? Inflation and Real Wages in U.S. Elections — An analysis of U.S. counties estimates that where wages grew faster than prices, voters supported the incumbent party more, while counties with larger real wage losses than average shifted more toward the opposition. A one-standard-deviation larger real wage loss is associated with shifts of roughly 0.10 and 0.19 percentage points in vote share and margin.
Showing 132 database articles primarily about Wages/Income