Rampant inflation has been in the headlines this year. But price levels have long been rising in this country, eroding the real wages of American workers.
According to CNBC, American workers earned an average of $27.45 an hour in June 2022. In 1972, the same workers earned an average of $3.88 an hour.
That’s serious wage growth, isn’t it?
Not so fast. These figures are nominal salaries which have not taken inflation into account.
Adjusted for inflation, American workers earn only 12 cents more today than they did in 1972.
In other words, real wages – wages in terms of the number of goods and services that can be purchased – have essentially stagnated for 50 years.
“When the average American doesn’t see their standard of living increase over a period of decades, that’s something we should all be concerned about,” Harry Holzer, a professor of public policy at Georgetown University, told CNBC. .
To get the white-hot inflation under control, the US Federal Reserve is raising interest rates aggressively. But the Americans can also take matters into their own hands. Here is an overview of three ways to lessen the impact of inflation.
Invest in passive income
Inflation erodes the purchasing power of cash. So if you have some spare cash, it may be better to put it to work than hide it under the mattress.
Real estate is a well-known hedge against inflation. As the price of raw materials and labor rises, new properties cost more to build. And that drives up the price of existing real estate.
Well-chosen properties can provide more than just price appreciation. Investors also get to earn a steady stream of rental income.
Of course, while we all love the idea of passive income, being a landlord comes with its hassles, like fixing leaky faucets and dealing with difficult tenants.
Read more: Grow your hard-earned money without the choppy stock market with these 3 easy alternatives
But you don’t have to be a homeowner to start investing in real estate. There are many real estate investment trusts (REITs) as well as crowdfunding platforms that can help you become a real estate tycoon.
Deploying excess savings in real estate could help you preserve your wealth. This cash flow could also supplement your income and help you with rising living expenses.
A Pew Research Center analysis reveals that changing jobs could be a smart way to boost your income. Data seems to suggest that 60% of people who changed jobs or employers between 2021 and 2022 saw their wages increase, while less than half of those who stayed saw their wages increase during this period. .
Which means if you’re looking to beat inflation, leaving your current job or employer for better opportunities may be your best bet to get the pay rise you’re hoping for.
Take a side gig
Extra revenue or side gigs have never been so popular. In fact, federal labor data revealed that in September, 420,000 people were working two full-time jobs simultaneously. These workers devoted about 70 hours a week to supplement their income.
You don’t need another full-time job to fight inflation. A simple side gig like tutoring could be worth $100 an hour, while walking a dog could earn you up to $1,000 a month, as SideHusl, an online gig platform, told CBS News. .
A flexible freelance role can help boost your income well above the rate of inflation.
What to read next
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
#concern #American #workers #earn #cents #today #adjusted #inflation #easy #tips #dollar #fly