Real Hourly Earnings on the Decline, Due to Inflation, but RI Might Be Doing a Little Bit Better than U.S.

On Friday, the Bureau of Labor Statistics (BLS) reported that the purchasing power of an hour of work went down in the United States:

Real average hourly earnings for all employees fell 0.3 percent from January 2012 to February 2012, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. A 0.1 percent increase in the average hourly earnings was more than offset by a 0.4 percent increase in the Consumer Price Index for All Urban Consumers (CPI-U). …

Real average hourly earnings fell 1.1 percent, seasonally adjusted, from February 2011 to February 2012. The decrease in real average hourly earnings combined with a 0.6 percent increase in average weekly hours resulted in a 0.4 percent decrease in real average weekly earnings during this period.

BLS doesn’t break this particular measure out on a state-by-state or region-by-region basis, mainly because its local wage data is not adjusted for inflation, and therefore not “real.”  However, it is possible to make some general inferences.

With respect to inflation, the Northeast region, which BLS uses for its “New England Consumer Price Index Card,” although it encompasses Pennsylvania to Maine, experienced a CPI-U from February 2011 to February 2012 that was 0.1 percentage points lower than nationwide.  Meanwhile, Rhode Island’s “non seasonally adjusted” average hourly earnings increased 6.4% over the latest period available (December 2010 to December 2011).  By way of a benchmark, the national average hourly earnings for production and nonsupervisory employees went up only 1.6% over the same period.

That said, on the national scale the number of hours worked per week went up 0.6% (to 33.7), while in Rhode Island, it went down 2.4% (to 32.9).  As a result the weekly earnings across the country increased by 2.2%, but by 3.9% in Rhode Island.

The various data points above aren’t sufficiently comparable to make definitive statements, but it appears generally to be true that Rhode Island is doing a little bit better than the country’s poor performance aligning pay with the cost of living.  Still, the picture is not terribly positive, and were RI’s high unemployment rate taken into account, it might be better seen as another marker of economic stagnation.

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