Americans are earning more than they did 25 years ago, but whether those pay increases actually translated into meaningful gains in buying power depends heavily on how inflation is measured, according to a new analysis from Pew Research Center.
The report, released Thursday, comes as inflation continues weighing heavily on households nationwide. In an April survey cited by Pew, 66% of U.S. adults said inflation is a “very big problem,” up from 63% a year earlier.
Pew found that median weekly wages more than doubled between the end of 1999 and the end of 2025, climbing from $482 to $1,040. But after adjusting for inflation, real wage growth was far more modest, ranging from roughly 11% to 22% depending on which inflation index economists use.
The findings underscore a disconnect many Americans continue feeling between rising paychecks and day-to-day affordability, especially after several years of elevated prices for housing, groceries, utilities and other essentials.
Using the federal government’s primary inflation gauge — the Consumer Price Index, or CPI-U — Pew found the real buying power of median weekly wages increased about 12.1% over the 26-year period.
Other inflation measures painted slightly stronger pictures. Using the “chained” CPI, which attempts to account more quickly for changes in consumer spending habits, real wages increased about 20.1%. Using the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures index, or PCE, Pew calculated real wage growth at 22.1%.
The report highlights how debates over the economy often depend as much on methodology as raw numbers. Different inflation measures weigh consumer behavior, housing costs and spending patterns differently, leading to varying conclusions about how much purchasing power workers actually gained.
Pew also noted that broader economic perceptions are heavily shaped by timing. While wages generally outpaced inflation over the last decade, the report found real wages declined over the five years leading into late 2025 regardless of which inflation measure was used.
That distinction helps explain why many Americans remain pessimistic about the economy despite relatively strong labor markets and rising nominal wages.
The analysis also stressed that inflation-adjusted wage growth can look dramatically different depending on which workers are examined, whether average or median pay is used, and whether benefits, investments or self-employment income are included.
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