Working Americans are not Earning Enough... ...to Keep Up With
the Rising Cost of Living The average hourly wage in America has
gone up about 45 percent since January 1, 2000, a pace much
slower than the over 84 percent increase in the cost of basic
essential needs. Each month, the U.S. government tells its
citizens how much prices have risen or fallen during the
previous month and for the past twelve months. The Consumer
Price Index (CPI) that they use contains data collected from
spending surveys given by the U.S. Bureau of Labor Statistics.
The basket of goods contains prices of necessities and
discretionary spending items. It is not a cost-of-living index,
but a consumer spending index. As we have been saying for some
time, a key problem with using the CPI to track the rising cost
of living is that the basket of goods is represented is
periodically altered. The BLS adjusts the weighting of the
components, and also smooths the data based on seasonal
patterns. Such tinkering usually results in an understate