It is no secret to anyone that wages have not kept up with the rampant inflation created by the Joe Biden economy. People are stuck paying much more to get less, all while making the same amount of money. It has created frustrated consumers, but where there is darkness, there is always hope things will rebound once again. However, according to a new Bankrate Wage to Inflation Index released this month, that will not be the case.

Their index indicated that wage growth is not expected to recover from inflation by the fourth quarter, as they previously anticipated. It is now projected to take at least another two quarters for wage growth to catch up.

Sarah Foster from Bankrate says since January 2021, inflation has increased 20 percent during that period, as wage growth increased 17 percent. While the gap has narrowed recently, there is a way to go.

"The gap is getting smaller, but there is still a gap...and it will take a little more time before American paychecks recover from the price surges after the pandemic," she says.

Bankrate had initially projected wages to grow 4.6 percent between the second quarter of 2024, and the second quarter of 2024. It ended up at 4.03 percent, while inflation landed at 3.18 percent that same period.

Now, they project it will be the second quarter of 2025 where we see wages catch back up. But there are other factors at play, which might push it even further.

"The fact this has been pushed back two quarters does not have so much to do with inflation, but rather the slowing job market," she says.

We have seen the Biden administration fib jobs numbers by a great amount the last few months. In total over the last year, they have redacted close to a million jobs from their reports.

The Federal Reserve on Wednesday did cut interest rates for the first time in four years by a half percent. That though was done without inflation reaching their goal of two percent. Which could springboard inflation right back up and hit wage growth and job growth harder.

"If they get interest rates wrong and slow the economy down too much...what is at stake is Americans being able to recover from inflation," she says. "If the job market slows more materially, that ultimately weighs on wage growth, too."

However, Foster adds not all industries lost ground. She says wages in accommodations and foodservices, as well as leisure and hospitality have continued growing faster than inflation.

Michael Berry