July 03, 2024
Low-wage workers have seen large real wage gains since the pandemic, so naturally as we come to the July 4th holiday the New York Times gives us a piece telling us how they are hurting. The piece is headlined, “America’s divided summer economy is coming to an airport or hotel near you.” If there is any ambiguity here the subhead tells us, “The gulf between higher- and low-income consumers has been widening for years, but it is expected to show up clearly in this travel season.”
It’s striking that we see a widening gulf with real wages rising far more rapidly at the bottom than the top. Real wages for workers in the bottom decile have risen 12.1 percent in the last four years. For workers in the second quintile, they have risen by 5.0 percent.
These increases come after four decades where they were close to stagnant and in spite of the enormous disruptions created by the pandemic. Given this reality, it is striking that the NYT felt the need to tell us that lower paid workers are now suffering this July 4th.
To tell this story, they found an extremely atypical worker.
“Recent economic trends could exacerbate that. Lashonda Barber, an airport worker in Charlotte, N.C., is among those feeling the pinch. She will spend her summer on planes, but she won’t be leaving the airport for vacation.
“Ms. Barber, 42, makes $19 per hour, 40 hours per week, driving a trash truck that cleans up after international flights. It is a difficult position: The tarmac is sweltering in the Southern summer sun; the rubbish bags are heavy. And while it’s poised to be a busy summer, Ms. Barber’s job is increasingly failing to pay the bills. Both prices and her home taxes are up notably, but she is making just $1 an hour more than she was when she started the gig five years ago.”
For a typical worker at Ms. Barber’s point in the income distribution nominal wages (before adjusting for inflation) rose 30.4 percent over the last five years. This means that if she were representative of a worker at her point in the wage distribution she would have seen a pay hike of around $5.40 an hour rather than the $1.00 increase reported in the article.
The piece itself acknowledges this point:
“While that is not the standard experience — overall, wages for lower-income people have grown faster than inflation since at least late 2022 — it is a reminder that behind the averages, some people are falling behind.”
It is hard to understand why the paper would deliberately choose to make such an atypical worker the focus of its article. It might have been helpful if it had chosen to tell us how a worker who received something close to the average pay increase is faring on this holiday.
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