Comment by Retric
18 days ago
Wow, being that deceptive implies your argument is false.
You imply there some something different around that date, but only show data prior to that date for one of those lines. WTF.
Dig a little deeper and the median wage is calculated by literally asking people roughly what they make and changing the methodology in 1994. Health insurance alone is a big difference in the ratio of people’s nominal wages and their actual incomes between those dates.
1979 is when the Fed began collecting median wage data. Here [1] is inflation data since 1947. You can see that 1979 was well into the funny money inflation era. The reason this is relevant is that it's impractical to literally lower wages - that's going to turn your labor force hostile like nothing else. But with inflation this is suddenly very easy to do - just give people a 2% 'raise' and they're content enough. Some might even be happy, even though that's generally a direct pay cut, thanks to inflation.
Real wages started becoming grossly detached from other metrics in society once inflation started going wild, and I don't think it's just a coincidence. In any case this is why it's very reasonable to think that real wages were even higher prior to 1979.
[1] - https://fred.stlouisfed.org/series/CPIAUCSL
> 1979 is when the Fed began collecting median wage data.
Making it at best absolutely worthless for your argument which I used to think was accurate. Congrats you helped change my mind.
> just give people a 2% 'raise' and they're content enough.
2% annual wage growth is well below average. https://fred.stlouisfed.org/series/FRBATLWGTUMHWG83O
Looking for the actual causes after seeing your post the death of the US union had an incredibly strong effect on median wages. The wage distribution vs 20th or 80th percentile is quite different, plus a much larger percentage of median wage earners shows up as heath insurance. https://www.bls.gov/opub/mlr/1986/09/art1full.pdf
Also, 1979 isn’t the inflection point on the graph on that page instead 1970 is. Worse inflation slowed down in 1979.
You are using two different inflation measures in the original graph.