TRANSKRYPCJA 🔗
WEBVTT
1
00:00:00.070 --> 00:00:02.710
Let's talk about something that probably hits closer to home
2
00:00:02.770 --> 00:00:06.669
than any stock market headline or GDP report, your paycheck.
3
00:00:07.230 --> 00:00:09.949
You might have gotten a raise this year, maybe even
4
00:00:10.009 --> 00:00:13.210
last year too. So why does it feel like you're
5
00:00:13.230 --> 00:00:17.899
falling behind anyway? Here's the uncomfortable truth. For a huge
6
00:00:17.940 --> 00:00:21.440
chunk of American workers, that raise didn't actually keep pace
7
00:00:21.480 --> 00:00:23.620
with the cost of everything else going up around them.
8
00:00:24.199 --> 00:00:29.960
We're talking about something economists call sticky wage norms. And honestly,
9
00:00:30.179 --> 00:00:33.179
it's one of the sneakiest forces shaping your financial life
10
00:00:33.240 --> 00:00:37.549
right now. Here's how it works. Most companies don't sit
11
00:00:37.609 --> 00:00:41.250
down every year and calculate exactly how much inflation ate
12
00:00:41.310 --> 00:00:45.530
into your buying power, then adjust your pay accordingly. That's
13
00:00:45.590 --> 00:00:48.719
not how it works in the real world. Instead, firms
14
00:00:48.759 --> 00:00:53.560
tend to pick one standard raise percentage, maybe 3%, maybe 4%,
15
00:00:53.560 --> 00:00:56.600
and apply it across the board to most employees, regardless
16
00:00:56.619 --> 00:00:58.950
of what's happening with prices at the grocery store or
17
00:00:58.969 --> 00:01:02.090
the gas pump. That worked fine during periods of low
18
00:01:02.130 --> 00:01:08.489
stable inflation. But then 2021 through 2023 happened. Inflation spiked hard,
19
00:01:08.790 --> 00:01:13.549
and those sticky standardized raises simply couldn't keep up. The result?
20
00:01:14.310 --> 00:01:17.250
Research from the National Bureau of Economic Research found that
21
00:01:17.250 --> 00:01:23.689
37% of workers experienced cumulative real wage declines between 2021
22
00:01:23.689 --> 00:01:28.049
and 2025. Let that sink in. More than a third
23
00:01:28.090 --> 00:01:31.329
of the workforce got nominal raises on paper. But when
24
00:01:31.370 --> 00:01:34.590
you adjust for what things actually cost, they ended up
25
00:01:34.670 --> 00:01:37.650
poorer than before. So what do people do when their
26
00:01:37.689 --> 00:01:42.159
paycheck quietly shrinks in real terms? They adapt, often in
27
00:01:42.219 --> 00:01:45.480
ways that aren't sustainable long term. This is what we're
28
00:01:45.500 --> 00:01:49.700
calling the working more, keeping less phenomenon. People start picking
29
00:01:49.739 --> 00:01:53.159
up extra shifts. They stretch their average work week longer.
30
00:01:54.239 --> 00:01:57.299
they dip into savings they'd rather not touch. And when
31
00:01:57.319 --> 00:02:01.359
that's not enough, they turn to credit cards, buy-now-pay-later apps,
32
00:02:01.879 --> 00:02:05.260
or those cash advance services that promise quick relief
Load full transcript
but
33
00:02:05.319 --> 00:02:09.409
often come with steep fees. It's a defensive scramble just
34
00:02:09.449 --> 00:02:11.770
to maintain the same standard of living they had a
35
00:02:11.810 --> 00:02:15.509
few years ago. Now, here's an interesting wrinkle in all this.
36
00:02:16.349 --> 00:02:19.889
Not everyone experienced this equally. If you switched jobs during
37
00:02:19.909 --> 00:02:23.550
this period, you likely saw wage increases that actually tracked
38
00:02:23.650 --> 00:02:27.789
closer to inflation. Employers competing for new talent had to
39
00:02:27.870 --> 00:02:31.110
offer more competitive pay to lure people away from their
40
00:02:31.150 --> 00:02:35.090
current jobs. But here's the catch. Most people don't switch
41
00:02:35.150 --> 00:02:39.590
jobs that often. The loyalty, the comfort, the risk aversion,
42
00:02:39.900 --> 00:02:43.699
whatever the reason, job switching simply isn't frequent enough across
43
00:02:43.740 --> 00:02:47.300
the whole economy to offset the systemic real wage decline
44
00:02:47.340 --> 00:02:51.000
for everyone else. So you end up with this two-tier reality,
45
00:02:51.599 --> 00:02:57.000
job changers doing OK, job stayers quietly losing ground. This
46
00:02:57.080 --> 00:03:00.139
also explains something that's been puzzling a lot of economists
47
00:03:00.219 --> 00:03:04.219
and journalists lately. Why does consumer sentiment remain so gloomy
48
00:03:04.500 --> 00:03:07.810
even as headline inflation numbers have cooled down? The answer
49
00:03:07.840 --> 00:03:10.430
is actually pretty intuitive once you think about it from
50
00:03:10.490 --> 00:03:15.990
a regular person's perspective. People aren't reacting to abstract macroeconomic
51
00:03:16.050 --> 00:03:19.840
indicators on a chart. they're reacting to their own personal
52
00:03:19.879 --> 00:03:23.099
experience of walking into a grocery store and watching their
53
00:03:23.150 --> 00:03:27.270
paycheck not stretch as far as it used to. Inflation
54
00:03:27.330 --> 00:03:30.169
cooling off doesn't erase the damage that's already been done
55
00:03:30.229 --> 00:03:34.189
to someone's purchasing power over the past few years. The
56
00:03:34.229 --> 00:03:39.180
psychological toll of constantly feeling behind that sticks around long
57
00:03:39.340 --> 00:03:43.560
after the official numbers start looking better. One more thing
58
00:03:43.580 --> 00:03:47.280
worth mentioning because it adds to the confusion. Depending on
59
00:03:47.340 --> 00:03:50.909
which inflation measure you use, the Consumer Price Index or
60
00:03:50.949 --> 00:03:55.330
the Personal Consumption Expenditures Index, and depending on what timeframe
61
00:03:55.349 --> 00:03:58.490
you're looking at, you can get wildly different answers about
62
00:03:58.530 --> 00:04:03.240
whether wages have kept up with inflation. This measurement disparity
63
00:04:03.300 --> 00:04:06.659
is part of why you'll see conflicting headlines. One article
64
00:04:06.719 --> 00:04:09.990
says wages are winning the inflation fight. Another says they're
65
00:04:10.000 --> 00:04:15.449
losing badly. Both might be technically accurate, just using different