Wages and benefits rose by 3-point-1 percent in 2005, but inflation rose even more. Inflation was at 3.5 percent last year according to the U.S. Department of Labor.
Dale DeBoer -- an economics professor at UCCS -- says higher oil costs are the main culprit. He says there's a higher domestic demand for oil now than there was ten years ago because cheaper oil in the 1990s encouraged consumers to buy large, inefficient vehicles that are still on the road today. "Since we were driving big vehicles that were relatively energy inefficient, we're stuck with those," said DeBoer.
World-wide demand on oil is also increasing as countries like China and India are quickly becoming more industrialized.