Latest / Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power / Why Your Raise Is Finally Beating the Cost of Dental Care
Transcript
- Lucas: So the average private-sector worker is now pulling in $37.60 an hour. That is up about 2.3 percent from a year ago. But here's the thing — dental care costs have been climbing even faster for years. Until now. Luna: Wait — are you saying our raise is finally catching up to the dentist? Lucas: Exactly. The latest CPI data shows dental services inflation actually cooled in June, while hourly earnings kept rising. So for the first time in a while, that root canal isn't eating up a bigger share of your paycheck. Luna: I need to hear the numbers. How much are we talking? Lucas: Okay, so the CPI for dental services rose just 2.1 percent year-over-year in June. That is down from over 4 percent in 2023. Meanwhile, average hourly earnings are up 2.3 percent. So wages are finally edging ahead. Luna: That is a big reversal. For years, dental costs were outpacing everything. I remember paying $150 for a cleaning in 2020 and now it's $200. Lucas: Right, and that pattern held through most of the pandemic recovery. Dental practices had to raise prices to cover supply chain issues, labor shortages, and higher material costs. But now those pressures are easing. Luna: What changed? Is it just that supply chain stuff normalized? Lucas: Partly. Dental supplies — things like gloves, masks, composite resins — those prices have stabilized. Plus, dental offices are finding it easier to hire hygienists and assistants, so they aren't having to jack up wages as much, which in turn lets them keep price increases modest. Luna: But overall healthcare costs are still rising. Why is dental different? Lucas: Great question. If you look at the medical care CPI overall, it's still running around 3.5 percent. Hospital services are still sticky. But dental is a more competitive market — there are many private practices, and patients are more price-sensitive because a lot of dental work is out-of-pocket or has limited insurance coverage. So when costs moderate, practices can't just keep raising prices. Luna: So wage growth is finally giving us a little breathing room at the dentist. But is it enough to actually feel it? Lucas: For the average worker, yes. If you earn the median weekly wage of $1,204, a typical dental visit — say a cleaning and exam — runs about $200. A year ago, that was 16.7 percent of your weekly paycheck. Now it's about 16.6 percent. Small, but the trend is in the right direction. Luna: I'd take any improvement. But what about people with no dental insurance? They pay full price. Lucas: That's the rub. The uninsured are still hit hard. But even for them, the rate of increase is slowing. And with wages up, they have a bit more room. Luna: Let's talk about the broader picture. If dental costs are moderating while wages grow, does that mean the average household is actually better off? Lucas: It's one data point, but it adds to the story. When you combine it with earlier episodes — where we saw wages beating rent, groceries, even used cars — you get a picture of gradual improvement in purchasing power. The key is that inflation has cooled, and the labor market is still tight enough to push wages up. Luna: But we also had that headline about import prices from China hitting a 2008 high. That could reverse some of these gains if tariffs push up costs. Lucas: That's the risk. If Trump's new tariffs stick and supply chains get disrupted again, imported goods — including things like dental equipment — could get pricier. But for now, the trend is positive. Luna: So what should listeners watch for in the coming months? Lucas: Keep an eye on the employment cost index — it came in at 177.5 in the first quarter, up 0.7 percent. That's a broader measure of total compensation. And watch dental services CPI in the next release. If wage growth stays above 2 percent while dental inflation stays under, the gap widens. Luna: You know, talking about this — it reminds me why we do this show without ads. Because when you understand how your paycheck actually stacks up against specific costs, you make better decisions. And we want that information to be free. Lucas: Yeah, that's exactly it. We keep the episodes ad-free so anyone can access this. If you find value in it, supporting the show on buy me a coffee dot com slash fexingo is what keeps it that way. No pressure, just if you want to help. Luna: And it really makes a difference. A few listeners chipping in keeps the lights on. Lucas: Alright, back to the numbers. Another way to think about this is the real wage growth. With overall CPI down 0.4 percent month over month in June, real hourly earnings — adjusted for inflation — are actually up. That's a win. Luna: True. And dental care is just one piece. But it's a tangible one. I know my last cleaning was less painful on my wallet. Lucas: Exactly. And that's the kind of shift worth paying attention to. So next time you're in the chair, at least you know the numbers are working in your favor for once. Luna: Thanks, Lucas. And for anyone wanting to track this themselves, check out the Bureau of Labor Statistics for the latest data. Lucas: We'll be back tomorrow with another angle on wages vs. prices. Until then, keep your smile bright and your budget tighter.