The latest consumer price index, out last week, showed inflation was 2.9% in 2024. Compare that to worker pay, which rose by 3.9% over the same period, according to the latest jobs report from the Bureau of Labor Statistics.

The math is pretty simple: Wage growth outpaced inflation by a percentage point. And it was pretty much the same story the year before, in 2023. That’s good news for the American worker. 

One big reason that real wages keep rising has to do with how managers are running their businesses these days.

Elizabeth Heilig runs the West Newton Cinema in Newton, Massachusetts. Before the afternoon’s films start to roll, she does one of the venue’s key chores: tossing popcorn.

Tossing makes the kernel-y bits no one wants fall to the bottom. And while popcorn is still scooped by hand in the front of the house, Heilig said other employee tasks are being automated, thanks to tech upgrades.

“The theater management system, or TMS, was literally installed on Wednesday of last week. And we’ve been working the kinks out. It is currently up and running. You know, fingers crossed,” she said.

The new software will let a single worker keep tabs on all six cinema screens at once.

“It will just eliminate a lot of running around and troubleshooting, if we’re aware of what’s going on in every theater from a central location,” Heilig said.

That means more films running on time, without more employees. In other words, a productivity gain. Which is happening all over the economy right now, said Edward Hearn, lead labor economist at UKG.

“Labor productivity is not everybody’s, like, leading metric they want to talk about because it’s kind of wonkish. But I do think it’s really the engine that’s driving things forward,” he said.

Hearn said businesses have made lots of capital investment in recent years — such as new manufacturing equipment or cinema management software — to help workers get more done. Plus, some firms are still letting employees work from home.

“Meaning people don’t have to commute into the office, or have to, you know, travel a lot or anything like that that sort of saps their hours from doing actual productive work,” he said.

And all this productivity is why wage growth keeps beating inflation, said Betsey Stevenson, a professor of economics at the University of Michigan.

“Real wage growth has to come from productivity growth. Because we’re doing more with less, we get more in the end,” she said. 

American workers have been doing more with less for two years, said Stevenson. That’s not the case in other countries.

“And that’s been the miracle of the U.S. economy. Americans don’t realize how much other countries coming out of the pandemic have had productivity slowdowns, and therefore have had real wage declines,” Stevenson said.

As long as productivity in the U.S. keeps climbing, she said, workers can expect their paychecks to keep outpacing inflation. So maybe an extra trip to the movies this month.