More reports reiterate that 2023 was a year where Wisconsin workers beat inflation

Caught this story from Wisconsin Public Radio, which pointed out that our state is like much of the country in that wage growth likely beat inflation in 2023, but won't be as high as it was in the more inflationary year of 2022.

Wage growth in Wisconsin has been slowing down this year, but inflation-adjusted personal incomes are expected to grow slightly after declining last year.

The state’s year-over-year change in annual pay was 5.6 percent in November, down from 8 percent in the same month of 2022, according to a report from ADP Research Institute.

The consumer price index, a key measure of inflation, showed prices were 3.1 percent higher in November than they were one year prior. But in the same month of 2022, prices were 7.1 percent higher than in November, 2021.

I dug a little more into the ADP report on wages in all 50 states, which basically uses a "market basket" of the same types of jobs to compare wages and changes across the nation.

Each month, payroll data from about 17 million U.S. jobs are used to estimate the annual pay cited in this report. We track the same cohort of workers over a 12-month period to compute year-over-year change in pay for matched individuals. The matching process results in about 10 million individual pay change observations each month.

And what's interesting here is that when you look at the same types of jobs, Wisconsin shaped up rather well compared to the rest of the Midwest, tying Illinois for the fastest change in annual pay at 5.6%. That said, it was well behind the increases in the Mountain West, which exceeded 7%.

The WPR article also mentioned the Wisconsin Economic Forecast from the Wisconsin Department of Revenue, which also mentions the return to real wage and income growth in 2023, and says it should continue for this year and beyond. It's not the growth we saw when stimulus checks were adding to these totals in 2020 and 2021, but it beats falling behind like we did in 2022.

Wisconsin personal income increased 2.0% in 2022 (revised down from 2.5%), with 7.6% growth in wages and salaries. The forecast anticipates nominal personal income growth of 4.1% in 2023 and 4.2% in 2024. High inflation rates resulted in a decline of 3.2% in real personal income in 2022, with expected growth of 0.5% in 2023....

US nominal personal income grew 2.0% in 2022, but inflation transformed that growth into a decline of 4.2% in real personal income. The expected 5.2% growth in personal income for 2023 will translate into mild growth of 1.3% after adjusting for inflation. S&P Global expects core PCE inflation to slow from 5.2% in 2022 to 4.2% in 2023 and further to 2.8% in 2024, reaching 2.2% in 2025.

Wisconsin personal income grew at an annual rate of 3.3% in the second quarter of 2023, compared to 4.3% nationwide and 4.1% in the Great Lakes region. A large drop of farm earnings was the main culprit for the lower Wisconsin growth in the first quarter of 2023. The September release revised personal income up and wages and salaries down in 2022 for Wisconsin and the US. Revisions to 2021 were upward for wages and personal income at both the state and national levels.

The forecast anticipates Wisconsin nominal personal income to grow by 4.1% in 2023 and 4.2% in 2024. After adjusting for inflation, Wisconsin real personal income is projected to increase 0.5% in 2023 and 1.8% in 2024 as inflation moderates.

Let's also note that while real incomes did fall in 2022, it was from a significantly higher level than we had in 2019. And if inflation continues to float down around 2% and wage and income growth for Wisconsinites stay around 4%, that seems like a pretty good deal to me.