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How many American workers have received a raise over the past couple of years? NPR teamed up with PBS NewsHour and Marist to find out, conducting a nationwide survey. NPR's Stacey Vanek Smith has the numbers.
STACEY VANEK SMITH, BYLINE: Most U.S. workers have seen their paychecks get bigger. More than 60% of the people we polled saw their pay go up last year. That means nearly 2 out of 3 workers got a raise. One of them was Donna Dunn. She lives in the town of Booker, Texas.
DONNA DUNN: We're really in the middle of nowhere. And we've put enough farmers in one location to call it a town and get a post office. Woo-hoo.
VANEK SMITH: Donna is the office manager at a health care clinic. She and her colleagues get a 3% cost-of-living raise every year. Of course, the actual cost of living has been rising a lot faster than that. When people see their wages go up, but prices are rising faster, economists call it the money illusion, as in, your paycheck looks bigger, but that is an illusion. You've actually lost money. That beefier paycheck is not buying as much beef.
Francine Blau is an economist at Cornell.
FRANCINE BLAU: People take two steps forward, and then they're pushed one step or maybe two steps backwards by prices.
VANEK SMITH: In fact, if you adjust for inflation, over the last year, U.S. workers got the biggest pay cut on record. None of this has been lost on Donna Dunn. She has five kids and says she watches her family budget very carefully.
DUNN: I can tell you the price of everything, and I can show you exactly how much it went up.
VANEK SMITH: She really can.
DUNN: The eggs - dozen eggs - used to be able to get a dozen eggs for $2.69. That exact same dozen eggs just today was $4.89. That's double price. The large boxes of Hot Pockets - 36-count box used to be 8.99. Now that same exact box, and it only has 24 in it now, is 13.99. I can tell you the price of meat. 2020, average hamburger meat, about 2.99 per pound. So now that exact same starts at 4.99.
VANEK SMITH: I mean, you know your prices.
DUNN: (Laughter).
VANEK SMITH: Donna's prices, by the way, track almost exactly with national numbers. Donna has made a bunch of changes in her family's diet - pork instead of beef, PB&J instead of deli meat, no more eating out, like, ever. Even still, her family food bill went from around $700 a month to more than $1,600 dollars a month. And Donna was drowning. So she and her co-workers approached the health clinic and asked for a raise.
DUNN: I advocate us for - you know, an inflation rate, is basically what they worded it. So that did help a little bit.
VANEK SMITH: But not enough.
DUNN: I have a dentist bill that I haven't got paid yet because I have to work it into the budget that's already split so tight. And it's very difficult to get government assistance.
VANEK SMITH: More than a third of the workers we polled said their finances had gotten worse in the last year. And an increasing number were falling behind on their bills. Economist Francine Blau says this kind of thing can start a vicious cycle in an economy. Workers ask for higher pay to afford rising prices. Companies pay them more and then jack up the prices of the stuff they sell to cover those raises.
BLAU: You can get into a spiral where inflation gets built into expectations, and prices just start to rise in a vicious upward circle.
VANEK SMITH: For her part, Donna Dunn has found some workarounds. Actually, she's grown them.
DUNN: I'm on a trade system with one of the other farmers. She has all the chickens and brings me the eggs. And I give her tomatoes and zucchinis and cucumbers.
VANEK SMITH: One way around the money illusion? Pay with vegetables.
Stacey Vanek Smith, NPR News. Transcript provided by NPR, Copyright NPR.