Frontline workers are getting raises, but inflation is whittling the gains to "pennies"

The U.S. labor shortage during the pandemic has helped boost wages for frontline employees like grocery clerks and retail workers at their fastest pace in years. Many restaurant workers have seen their wages jump 12% over the last year, a pay raise of more than $2 an hour.

Because of rising prices, however, those seemingly robust wage gains amount to an increase of only "pennies" per hour once inflation is included, according to a new analysis from the Brookings Institution. The study examined wages at 13 of the biggest and most profitable retail, grocery and fast-food companies in America — companies such as Amazon.com, which recently boosted wages to attract new hires. Together, these businesses employ 5 million workers.

"We're seeing headlines that, yes, wages did go up, but when you take into effect inflation, it's not up very much at all," said Molly Kinder, a co-author of the study and a fellow at Brookings Metro. And workers in these industries "started at such a low level that, even though it's still an almost 10% increase, it's still a very low wage."