U.S. worker compensation hits four-year low as inflation erodes wages

(ABC36 NEWS NOW) – New federal data released Wednesday shows that workers’ paychecks aren’t going as far as they used to. According to the latest Employment Cost Index, wages and benefits rose just 3.5 percent year-over-year last quarter — the slowest pace in four years.

That marks the weakest compensation growth since 2021.

Rising prices for goods and services continue to chip away at workers’ earnings. After adjusting for inflation, wages and benefits increased only 0.5 percent over the past year. At this time last year, inflation-adjusted compensation was growing nearly three times faster, at 1.4 percent.