Wages really are growing faster than inflation

A boon for workers, and for economic conspiracy theorists

It didn’t attract a ton of attention, but May of 2023 marked the first month since March of 2021 that annual wages rose faster over the past year than average prices,¹ and it feels like a big deal to me.

Macroeconomists and central bank staffers have their reasons for downplaying the significance of this, which we’ll get to later. But for most people, I think the difference between “full employment but wages are falling” and “full employment, falling inequality, and rising average wages” is a meaningful one. In fact, I’d say the delta between wages and inflation is a much bigger deal than the rate of inflation itself.

This is great news for the American people.

But good news for America is bad news for people who have totally unrelated objections to Joe Biden — if you want tax cuts for the rich, acquiescence to Russian conquest of Ukraine, or more restrictions on abortion, or maybe you just really hate elective pronouns, you don’t want Americans to feel better about the economic situat…