Quote:
Originally posted by cthulu23
It is the inflation adjusted value of a person's wages, nothing more or less, and is a standard economic measurement. Why do you consider it an inaccurate mesure? What is it failing to state?
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While it is a standard measure, every measure has it's pros and cons. In this case the measure fails on a couple of levels. First, it does not count overtime wages. With increasing costs of benefits businesses have gone to overtime more and more. Additionally, wages are basically the mean taken of all workers surveyed by the Bureau of Labor Statistics (BLS). The more workers there are the lower that mean will be (unless of course the economy's need for workers outstrips the supply and "new" workers are being paid substantially despite a relative lack of skills and this has not been the case for the majority of the time period we're looking at). Both the number of workers and the amount of overtime have been increasing over the last several decades pushing the "real wages" down.
Now, as far as buying power. Buying power is more a factor of wealth and wealth is built on a number of things besides income. Certainly, at times, income is more closely tied to wealth but at other times it isn't. For instance, home value contributes heavily to wealth but home ownership is not confined only to the wealthy as about 70% of Americans own their own home.
Now, let's throw the stock market into this. It used to be a wealthy man's game but today you see people from Wall Street tycoons to janitors riding the bus with investments in the market. Access to the market in the form of direct stock purchases, 401ks and other investment accounts make it possible for millions to benefit over the long term without anything more being put into their paychecks.