Let’s talk about your paycheck. Not your specific paycheck, but everyone’s paycheck. By the Bureau of Labor Statistics’ count, wages and benefits together rose 3.5% in September year to year.

That’s slightly more than inflation, which is good for workers, but it’s nothing to write home about either, considering it’s actually the lowest since 2021.

“There was a big runup in the growth of wages and benefits right after the pandemic and that’s been coming down steadily,” said Erica Groshen, senior economics advisor at Cornell University’s School of Industrial and Labor Relations.

The jobs that are getting the biggest raises now, are actually the ones that did not get those big raises during the pandemic.

“What you’ve seen is a catch up from the workers who were essentially left behind,” Groshen said.

For example, unionized workers who did not get big raises back then because they were locked into multi-year contracts are finally getting them. So are government workers. Leisure and hospitality workers who saw huge wage gains during the pandemic are now not seeing that.

“Now what’s catching up are wages more for the white-collar workers; the managerial workers etc.,” Groshen said.

Overall and for most people, wage growth has been faster than inflation. But not by much. Wages are winning by about a half a percent, the smallest margin in two years. 

“So, there isn’t much momentum in terms of real wage growth,” said Gregory Daco, chief economist at EY Parthenon.

He said inflation is nipping at the heels of lower and median income families the most.

“That’s a key driver of the ongoing affordability crisis that many families are facing,” Daco said.

There is, paradoxically though, a bright side to slowing wage growth. It means the labor market isn’t driving inflation. 

“This was the fear that many had when tariffs started being implemented,” Daco said.

That didn’t happen, but there is one cost in this employer cost index, that is exploding like a bomb.

“What employers pay for health insurance is hitting a level we haven’t seen in 20 years,” said Linda Barrington, executive director of the Institute of Compensation Studies at Cornell.

Employers cost of health insurance has risen 6.1% in a year. 

“When employers are seeing that level of increase, I would expect employees will be asked to pay some for that increase,” Barrington said.

So, some of this barely OK wage growth we’re seeing is going to get drained away to pay for that.