As paychecks are rising, so are prices. As 2021 was ending, there was a 4% rise in employee compensation. With this going on, prices were rising as well. According to the Bureau of Labor Statistics, this is the most significant increase since the fourth quarter of 2001.
Services, hotel, and restaurant workers were among the employees getting the biggest raises. America's labor costs rose dramatically last year as businesses struggled to find workers. The salary increases don't look as shiny anymore. Inflation-adjusted wages fell by 1.9% by the 12 months ending in December. Three-quarters of Americans said they are worried about the state of the economy in their communities.
According to the Bureau of Economic Analysis, key inflation rose by 5.8 % between December 2020 to December 2021. Eight in 10 people said the rising cost of food and other everyday items is a significant problem for the nation's economy, while 7 in 10 said the same about the jump in gas prices. Other critical economic issues cited include disruption in the nation's supply chain, the rising cost of housing, labor shortages, and government spending.
Inflation is wiping out the gains people got in their paychecks. Inflation is also becoming a problem for schools as school lunch prices increase. That's why the US Department of Agriculture is pumping an estimated $750 million more into school meals programs nationwide as part of a midyear adjustment to the reimbursement rate.
With inflation affecting the economy, many people have started questioning President Joe Biden. We can only hope our economy improves with time.