The Trump administration’s decision to start a war with Iran has imposed disastrous costs—both economic and humanitarian—around the world. The U.S. has been more insulated from these costs than most other countries, yet even here they are extremely large. The war’s effect in pushing up U.S. energy prices has erased all the real (inflation-adjusted) wage gains workers have made during his second term.

According to today’s Consumer Price Index (CPI) release, overall inflation was 4.2% over the last year. The sudden burst in inflation, along with slowing nominal wage growth, means that the average hourly real wage for private-sector workers is now no higher than it was in January 2025.

So far, excessive inflation has been limited to energy and airfares. But as long as the war continues, there is a heightened threat that price increases will spill over to the broader economy, triggering a more permanent increase in the cost of living and further reductions in real earnings.

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Update: The U.S. House passed the Faster Labor Contracts Act on June 9. 

Over the last five years, workers have won unions in several high-profile campaigns, including Amazon workers in Staten Island and Starbucks workers in Buffalo. These examples are a testament to workers’ determination and desire for greater agency in their workplace. But these Amazon and Starbucks workers have yet to reach a first contract with their employer, illustrating the issues many workers face when they win a union and begin collectively bargaining. Far too often, employers refuse to bargain in good faith with workers, significantly delaying a first contract. Currently, on average, it takes workers 465 days to bargain a first contract.

Today, the U.S. House of Representatives will likely consider legislation aimed at ensuring workers can reach a first contract without unnecessary delay. The Faster Labor Contracts Act establishes a timeline from bargaining to mediations and, if necessary, binding arbitration. These provisions discourage delay and promote good-faith bargaining, which is exactly how the law should work.

Corporate mergers and acquisitions are an example of how quickly employers can reach a deal when they want to: these complicated, multibillion-dollar deals can often be reached in a matter of weeks. When these corporate deals take longer, it is often due to government regulators challenging the legality of the corporate merger—not corporate conduct.

To demonstrate the difference in corporate conduct in bargaining with workers for a first contract versus corporate mergers and acquisitions, Table 1 shows examples of companies who have engaged in negotiations with workers and corporate mergers. While Starbucks completed a merger in 67 days, they have taken at least 1,643 days (and counting) to bargain a first contract with their unionized workers.

It is clear that corporations can move quickly to reach a deal related to a merger or acquisition but are far too often unwilling to apply that same priority to negotiations with their workforce for a fair first contract.

The authors thank the Student Policy Network at the University of Notre Dame for their contribution to this research. 

Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning, which showed 172,000 jobs added in May. Read the full thread here.

The latest jobs report came in stronger than expected this morning. The economy added 172,000 jobs in May and the unemployment rate held steady at 4.3%. Nominal wage growth continued to decelerate, further exacerbating affordability as prices rise.
#EconSky #NumbersDay @epi.org

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— Elise Gould (@elisegould.bsky.social) 7:46 AM · Jun 5, 2026

Job growth was strongest in leisure and hospitality, state and local governments, and health care. Losses continued in financial activities in May.

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— Elise Gould (@elisegould.bsky.social) 7:58 AM · Jun 5, 2026

Manufacturing employment rose by 7,000 in May, slowly clawing back the large losses last year.

Since January 2025 when Trump took office, the manufacturing sector has lost 68,000 jobs.

#EconSky

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— Elise Gould (@elisegould.bsky.social) 8:00 AM · Jun 5, 2026

While there’s been little change this year, federal employment has shrunk an alarming 333k jobs since Jan 2025. The vital services federal employees provide cannot be done without these essential workers.
#NumbersDay #EconSky

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— Elise Gould (@elisegould.bsky.social) 8:08 AM · Jun 5, 2026

Nominal wage growth continued to slow in May, now 3.4% over the year. While we don’t get the May inflation data until next week, it’s very likely, given recent trends, that real wages will continue to fall and workers and their families will find it increasingly difficult to make ends meet.
#EconSky

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— Elise Gould (@elisegould.bsky.social) 8:14 AM · Jun 5, 2026