According to Bloomberg News, when the topic of wage inflation is coming up, many Americans are saying that their salaries cannot keep up with the rising prices. In February, 73% of the workers with lower earnings, the ones defined as belonging to this group with a household income below $25,000 annually, said that they are feeling the pressures of inflation of late. However, just 9% of them could keep pace with the surging cost of living, as per a report from Capital One Insights Center.
Across the different income levels, only 18% of the consumers said that their current income level was able to keep up with the higher living cost.
The Labor Department data indicates the struggle that was reported Thursday. The report revealed that the inflation-adjusted average weekly income dropped by 2.3% in February compared to what it was one year earlier.
Ones with a household income of $100,000 and more were better equipped to keep pace with rising inflation that hit the mark afresh of 7.8%, which is a 40-year high in the last month. The ones with higher earnings were thrice as likely to say that they were able to cope with the rising inflation, at 31% due to their higher income, as expressed by Melissa Bearden. She is the head of consumer intelligence associated with Capital One.
An era of financial crunch
Bloomberg News reports that 30% of those belonging to the higher income group said they had just got a non-performance-based bonus or raise over the last three months, whereas the same was expressed by just 10% of those belonging to the lower-earning group.
Financial crunch is felt by those belonging to the lower-earning group. However, few individuals with higher income said that they felt the financial pressures. According to the survey, people having higher income levels have been struggling to pay up their bills twice as much as what they faced during the earlier stages of the pandemic, with the figures being recorded at 10% in April 2020 to 22% last month.
Data of Capital One was obtained from a series of nationally represented surveys taken since the beginning of April 2020 and the one that moved up from 2,000 people to 10,000 people taking the survey.
Bloomberg News also reports that many Americans are hopeful that the tax refunds will aid in easing the financial crunch. More than 50% of the lower earners, comprising 57% anticipating a tax refund, said that this will impact their financial well-being this year.
