Great Lakes Wire

Michiganders may be making more money at their jobs, but an editorial suggests the additional money they're making isn't reflected in their wallets because of the high cost of inflation nationwide. 

The Labor Department released its Employment Cost Index on April 29, which showed worker compensation grew at a record pace during the first quarter of the year. However, the Editorial Board at The Wall Street Journal said inflation is canceling out the normal wage gains. 

"That sounds better than it is, however, because inflation has erased the purchasing power of those raises," the Editorial Board said.

In the year leading up to March 2022, wages and salaries rose 5% compared to just 3% the year before, the Department of Labor said in a news release. Cost of benefits also rose 4.1% during the same time period compared to the year prior to March 2021 when it rose 2.5%.

"Inflation-adjusted private wages and salaries fell 3.3% for the 12 months through March, and inflation-adjusted benefits fell 4%," the Editorial Board said.

According to the Editorial Board, the increases don't mean much when the cost of inflation is factored in and even highlighted that employers were paying more to keep their workers since employees have bargaining powers while the nation deals with a labor shortage.

"Employees are making more but they can buy fewer goods and services with it," the Editorial Board said. "This is what economists mean when they call inflation a tax."

The Employment Cost Index has been called a quarterly economic series that details the growth of total employee compensation by Investopedia.com.

According to the Editorial Board, the Commerce Department released its report on the same day, revealing that personal disposable income fell in almost every month in the last six months.

Meanwhile, gas prices continue to represent the country's inflation problem.  According to AAA, as of May 6 the cost of a gallon of gas in Michigan was $4.31, which was four cents higher than the nation's average. At the same time last year gas was $2.95 a gallon in Michigan.