Life is getting worse for the average American worker in 2023

Life for the average American worker has gotten a lot worse in recent years but things might get a lot more difficult if economic data from the first quarter of the fiscal year is a predictor of what's to come for a burnt-out nation already in need of a break. 

Things have been bad for most American workers with the cost of living reaching what some consider to be an all-time high while wage stagnation has gotten to the point where inflation continually and consistently outstrips the average worker's wage growth.

Covid-19 may have lifted worker wages according to the New York Times but that has only worked to feed inflation as businesses tried to recoup losses. The end result was a kind of runaway inflation that ultimately eroded the power of any worker wage growth.

The New York Times pointed this out when noting that even though wages and prices were rising at their fastest pace in decades, workers were still losing out since the increases weren’t consistent and inflation outstripped wage growth for 22 consecutive months. 

Recent economic data presented by the U.S. Bureau of Labor Statistics from the first quarter of the fiscal cycle showed that the average American worker is toiling away for 2.2% more hours compared to the same period in the previous year as reported by Newsweek. 

The Bureau of Labor Statistics (BLS) also noted that the average real hourly compensation, a metric used to adjust worker earnings against the cost of purchasing consumer goods, had decreased by 1.7% in the first quarter of 2023 and declined by 2.6% over the previous four quarters.  

This means that the money you’re making is going less farther than it did last quarter and a lot less farther than it did over the last year. But that isn’t the only issue plaguing the average American worker at the moment. Things are terrible across the board. 

Productivity has collapsed from its historic heights during the Covid-19 pandemic. In the manufacturing sector, labor productivity saw a 2.5% decrease even as the number of hours being worked in the sector increased by 1.6% according to Newsweek. 

“Historically, the current business cycle—which began in 2019—has seen some of the lowest rates of worker productivity since the BLS began recording data, signaling a lingering sense of stagnation in the U.S. labor market,” wrote Newsweek's Nick Reynolds. 

Market Watch described productivity as “the secret sauce of the economy,” adding that it was worker productivity that allowed the United States to grow so strongly with no inflation in the 1990s. But why are Americans producing less than they did last year?

One key factor could be that people are just unhappy with their working life right now as businesses try to find the right balance coming out of the pandemic economy and young workers start to take center stage in companies after older workers retired during Covid. 

In March, MetLife’s 20th annual U.S. Employee Benefit Trends Study reported that American worker satisfaction had reached a 20-year low, with the least satisfied workers being between the ages of 23-28—the exact group taking on a new roles in most companies. 

“It’s clear we’ve reached a critical inflection point in the workplace,” said MetLife’s Vice President Todd Katz, “and employers across industries should not only be taking note but should also see this as an important opportunity for reflection and growth.”

However, Hofstra University economist Gregory DeFreitas believes the dip in morale was inevitable and he spoke to Newsweek about the current problems facing American workers and why they were likely to be a drag on the country’s economic output. 

"While economists disagree about recent discouraging U.S. productivity trends, there's little question that worker morale—a key factor behind productivity—is being hurt when their real wages fall,” DeFreitas explained.

DeFrietas went on to question why wages were rising slower than prices and said that the blame probably lies with large employers who had been driving much of the country’s inflation while minimizing their employees' pay gains to bring in more profits.

In the end, it's the American worker who has been losing out. While workers spend more time working than they did a year ago, their earnings aren’t going as far as they did when they worked less. No wonder so many people are unhappy and burnout.