General Discussion
In reply to the discussion: Bernie Sanders: Do you know why millions of our people are stressed out? [View all]aggiesal
(8,914 posts)The nominal wage is the wage measured in money (dollars in the United States).
The real wage is the nominal wage in an economy adjusted for changes in purchasing power.
So, it looks like real wages are what we feel, because it determines what we can afford to buy
from year to year, which makes it more important then nominal wages.
In the graph below you'll notice that since 2000, nominal wages have gone up 25.2%, but
real wages have gone down 7.9%.
I interpret that to mean that, if I'm living paycheck-to-paycheck, and even though I'm making more money than 2000,
in 2013, I would not be able to pay my bills, because inflation has grown faster then my pay raises.
My wife hasn't had a pay raise in 5 years. Not even cost of living adjustments (i.e. inflation)!
So yes, it is harder to save money, when you have none to save at the end of the month.
Let me know if I misinterpreted.