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Wages, inflation and the 2024 election: An important message for HR leaders
- Inflation severely affected the buying power of average workers, says the author based on real wage data showing purchasing power declined.
- Median wages, the best measure to see what is happening to the typical person, were tracked by the Federal Reserve, which found weekly earnings had risen in the workplace every year since 2015.
- Americans were far better off by 2020, after sweeping government subsidies, than at any other time, and were still better off after those subsidies ended.
- The perception of a decline in wages among certain demographic groups may have contributed to Republican voting trends, says the author.
- A reminder to businesses provided by the author is that taking something away is painful, and a focus on immediate events leads to forgetting long-term trends.
- Employers can shape employees' perceptions of their situations by shaping comparisons and reminding them.
- The Federal Reserve's tracking of median wages indicates that Americans have had better purchasing power in the workplace every year since 2015, however this hasn't translated to a perceptual increase in wages for some demographic groups.
- The reason for this, according to the author, is that perception is relative and is shaped more by a person's relative ranking than by their absolute income.
- White men, who saw a decline in wages after 2020, were in a relatively worse position than other demographic groups and have been identified as a group that predominantly voted Republican in the recent presidential election.
- The author's advice to HR managers is to acknowledge that taking things away can hurt people and their perception of the workplace and remind employees of the employer's contributions to their well-being.
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