Wages are up about 5%. But after inflation, American workers have taken a pay cut

American workers have seen their wages climb faster than at any time since the mid-1980s. But high inflation means workers have been handed a pay cut.

Every time inflation ticks up, it takes a bite out of workers' pay and chews away at their bank accounts. And this current stretch of inflation -- triggered by a confluence of events, including the war in Ukraine and the ongoing pandemic -- has had a voracious appetite.

That has meant wage hikes have actually turned into losses, with the latest inflation report showing consumer prices shot up by 8.6% for the year ending in May. As a result, the average consumer is having to cough up an estimated $460 more every month than they did at this time last year to pay for the same goods and services, according to Moody's Analytics. Additionally, research from the University of Michigan found that real disposable income per capita is on track to show the greatest yearly decline since 1932.