A worker’s economic position depends on more than the number on a paycheck. Housing costs, healthcare, transportation, taxes, working hours and job security all affect real living standards.
Two workers with identical wages can therefore have very different financial lives. Productivity and labor demand matter for wages, while bargaining power and labor-market institutions influence how productivity gains are shared.
A broader view of compensation includes benefits, stability and opportunities for advancement. This helps explain why headline wage growth can coexist with financial stress.