The pay people take home after accounting for inflation fell 1.3 percent last year, a new analysis shows. The findings come a year after President Donald Trump, with his administration promising it would deliver "immediate" wage growth to workers.
Yet many workers' wages aren't keeping pace with the cost of living, compensation-data company PayScale found. That's concerning because it indicates more Americans are falling behind -- despite seeing the lowest U.S. unemployment rate in nearly 50 years -- and could struggle to maintain their standard of living when the next recession inevitably rolls around.
PayScale examined the difference between nominal wages -- what you're paid on paper -- and a paycheck's actual purchasing power after accounting for inflation, or what economists call "real" wages. If pay growth is lower than the rise in the cost of living, a worker will have less purchasing power.
That may explain why Americans reported anabout personal finances last year, with nearly three-fourths of women and three-fourths of young adults ages 18 to 34 saying they were somewhat or extremely anxious about paying their bills.
The dip in real wages also is notable as it came during a year when corporations got generous breaks thanks to the Tax Cuts and Jobs Act. Instead of providing higher wages, however, many companies used the money to repurchase shares, whicha record $1 trillion last year.
"Although there are positive macroeconomic indicators, it's not a guarantee, and not everyone is experiencing the benefits," said Katie Bardaro, chief economist at PayScale. "Wages aren't moving at the rate they should be unless you are in in-demand jobs."
Notably, wages in manufacturing -- a sector that Mr. Trump promised to revitalize -- suffered one of the largest declines in real wages, which slipped 2.4 percent last year. Transportation witnessed the biggest dip, with real wages losing 3.9 percent compared with a year earlier. At the same time, the tech sector roared ahead, with wages rising 2.7 percent.
The manufacturing and transportation sectors may be feeling the impact of the Trump administration's trade war with China. Fewer imports would mean less demand for transportation to haul those goods across the country, for instance.
"We cannot underscore the impact that these trade policies have had," Bardaro said.
PayScale's study examines wages for full-time, private industry employees and education professionals.
Americans are also experiencing different wage growth by region, PayScale found. The strongest wage growth is being enjoyed in metropolitan areas on the coasts, such as San Francisco. But cities in the midwest and south are struggling.
Wages in Nashville slipped 0.7 percent in the fourth quarter while those in Detroit declined 0.6 percent, representing the lowest of the more than 30 cities tracked by PayScale.
"There is this dichotomy between the coastline and the non-coastline regions in the current political climate," Bardaro said. "That could have real lasting effects on our country."