Illinoisans see $2,200 pay cut thanks to inflation
Wages rose in Illinois, but inflation rose even more. That left the average worker almost $2,200 worse off.
The average Illinois worker needed a pay raise of $5,360 to keep up with inflation this past year. That worker only got a little more than $3,164.
So that $3,164 pay bump was actually equivalent to a nearly $2,200 pay cut.
When you add up all of the price increases because of inflation, Illinoisans are paying $4,233 more for the same goods and services this year compared to last year.
On an annual basis, the average Illinois worker will shell out $1,021 more for gasoline this year, $844 more for housing, $454 more for groceries, and $264 more for utilities. By the time you add up all the different ways inflation nickels and dimes you, the total cost adds up to more than $4,233.
New inflation data released May 11 by the U.S. Bureau of Labor Statistics projects average prices rose 8.3% from April 2021 to April 2022. While the new data pegs inflation at a lower rate than the March figure of 8.5%, the latest Consumer Price Index numbers still came in higher than the projected 8.1% consensus among economists.
The lackluster inflation figures have also led some to raise concerns inflation may have plateaued rather than peaked, meaning Americans can expect prices to continue rapidly rising for a bit longer.
Illinoisans are feeling the pain of the highest inflation rates in 40 years. In many cases, there’s little Illinoisans can do to avoid the inflation tax.
Gasoline is up 44% in the past year; Grocery bills are up 11% on average; energy services are up 14%. Workers can’t just stop their daily commute, buy less food for their family, or stop heating and cooling their homes. A large portion of these expenses are necessary, so high inflation means Illinoisans are gritting their teeth and paying higher bills. That leads to cutbacks in other recreational and leisure activities and reduces savings, which ultimately lower Illinoisans’ quality of life today and in the future.
With many economists forecasting a prolonged period of high inflation, the Federal Reserve will likely be prompted to continue interest rate hikes. For Illinoisans, this presents an unpleasant tradeoff: continued high inflation or an increase in unemployment because of rising interest rates.
Neither scenario will be friendly for Illinoisans, however they appear unavoidable as record spending and wide-spread federal stimulus coupled with supply chain disruptions and pent-up demand from COVID-19 have created our current inflationary environment.