Your Money Minute – "Wages Aren't Keeping Up With Inflation For Some"
Podcast: Your Money Minute (CNBC)
Host: Jessica Ettinger
Air date: December 5, 2025
Episode Overview
In this concise episode, Jessica Ettinger addresses the growing concern over wage stagnation amid persistent inflation. Drawing on current economic data and industry insights, she explains how stagnant wages are eroding Americans’ buying power, particularly as inflation remains steady at 3%. The episode also features commentary from Paychex CEO John Gibson on the implications for both workers and small businesses.
Key Discussion Points & Insights
1. Current State of Wage Growth vs. Inflation
- Stagnation Defined:
- Jessica Ettinger opens by stating, "Inflation is sitting at about 3%. If you're not getting at least a 3% raise, you're experiencing what's called wage stagnation and your buying power is not keeping up." ([00:00])
- Consequence of Lagging Wages:
- Hourly wage growth has been below 3% for the 15th consecutive month—directly trailing the pace of inflation.
- Result: "Your dollars are buying less." ([00:25])
2. Small Businesses & The Hiring Landscape
- Small Businesses' Role:
- Small and medium-sized businesses "do the bulk of the hiring in the US," but hiring is slowing and these employers aren't raising pay. ([00:25])
- Industry Data:
- Data cited from payroll firm Paychex shows wage growth continuing to lag.
- The Paychex CEO notes that the lack of wage growth is, paradoxically, contributing to easing inflation.
3. Silver Linings & Economic Impact
- CEO Perspective:
- The silver lining, as described by Paychex CEO John Gibson:
- “When people don't have any more money to spend, it may bring inflation down a little.” ([00:46])
- Further elaboration:
- "Wages are a big part of the cost mix of any small mid sized business. If you keep labor below 3%, you've got something that's going continue to move inflation down towards the fed target of 2%." ([00:53])
- Fed's Inflation Target:
- Keeping wage growth low is viewed as a factor in helping guide inflation closer to the Federal Reserve's 2% target.
4. Resources
- Where to Learn More:
- Jessica directs listeners to CNBC.com for further details on inflation and the labor market. ([01:08])
Notable Quotes & Memorable Moments
- On Wage Stagnation:
- Jessica Ettinger: "If you're not getting at least a 3% raise, you're experiencing what's called wage stagnation and your buying power is not keeping up." ([00:04])
- On Consequences for Workers:
- Jessica Ettinger: "Your dollars are buying less." ([00:25])
- On Small Business Impact:
- Becky Quick (paraphrased by Ettinger): "Small businesses do the bulk of the hiring in the US and not only is hiring slowing, these businesses aren't raising pay." ([00:27])
- Silver Lining for Inflation:
- Paychex CEO John Gibson: "When people don't have any more money to spend, it may bring inflation down a little." ([00:46])
- John Gibson: "Wages are a big part of the cost mix of any small mid sized business. If you keep labor below 3%, you've got something that's going continue to move inflation down towards the fed target of 2%." ([00:53])
Segment Timestamps
- [00:00] – Wage stagnation explained; inflation vs. wage growth
- [00:16] – Hourly wage growth below inflation for 15 months
- [00:25] – Buying power declines; small business hiring and pay slows (Data from Paychex, via Becky Quick)
- [00:46] – Paychex CEO on how stagnant wages may help curb inflation
- [01:08] – Reference to more resources on CNBC.com
Summary
This episode concisely illuminates the disconnect between wage growth and inflation, emphasizing the reality that for many Americans, paychecks simply aren’t stretching as far as they should. The perspectives from payroll data providers and small business leaders reinforce broader economic trends—and underscore both the challenges for consumers and potential macroeconomic benefits for inflation targeting. Listeners are encouraged to seek out further analysis on CNBC for those wanting a deeper dive into these urgent labor market dynamics.
