That’s according to an August, 2018 Pew Research study. It notes that while the labor market is currently strong, purchasing power has not budged over the long haul. Looking back over 50 years, data show that a $2.50 wage (the prevailing average hourly wage) spent in 1964 could buy $22.27 of stuff (in 2018 dollars.) Now, decades later a $22.65 hourly wage earned in 2018 buys just that: $22.65 worth of goods and services.
The report says, “In seasonally adjusted current dollars, median usual weekly earnings rose from $232 in the first quarter of 1979 (when the data series began) to $879 in the second quarter of this year, which might sound like a lot. But in real, inflation-adjusted terms, the median has barely budged over that period: That $232 in 1979 had the same purchasing power as $840 in today’s dollars.”
What’s behind this phenomenon? The report suggests a number of possible culprits, including the ever-growing cost of employee benefits, perhaps making employers less likely to raise wages. But, at the same time, employers have no problem upping the wages of their highest paid workers; they have seen an average wage gain since 2000 of a cumulative 15.7 percent, while lowest paid workers have only reaped a 3 percent increase during the same period.
When you factor in wages earned in Connecticut, purchasing power is even less. Forty-five percent of Connecticut workers earn under $20 an hour – they have less money to spend to begin with, and what it can purchase is even less.
Please enjoy the grocery store ad from the 1960s. That’s the “good old days” when pork roast was 43 cents a pound, a five-pound bag of oranges was 35 cents, and a can of tuna was 25 cents, for a total of $1.03. Forget about nutrition value. The most you could get today for $1.03 might be a candy bar.