US wages are undoubtedly in stagnation
Donald Trump certainly has the Democratic Party on the run, especially after recent comments to the media about his concerns over the working class:
"Five, ten years from now – different party. You're going to have a worker's party," Trump told Bloomberg News. "A party of people that haven't had a real wage increase in 18 years, that are angry."
"What I want to do, I think cutting Social Security is a big mistake for the Republican Party. And I know it's a big part of the budget. Cutting it the wrong way is a big mistake, and even cutting it [at all]," Trump said.
Like clockwork, the Washington Post then published a story claiming that U.S. wages probably have not stagnated.
In fact, the Federal Reserve's own data shows unequivocally that the average American worker has seen wage stagnation dating back at least 18 years, and more likely to at least the late 1970s.
Since 1989, real median household income has increased, in total, just 0.66%. That represents an annualized rate of increase of only 0.026%. This is the textbook definition of stagnation. Since 1999, the real median household income has actually declined by 7.2% and the trajectory is clearly continuing downhill.
Using an alternate measure of central tendency, the real mean family income stopped growing entirely in 2000. Since 2000, it has declined by nearly 2%. The real mean personal income displays the same trend – plateauing since 2000 with a 0.2% decline over this time frame.
Then we have the median usual weekly real earnings for all wage and salary workers aged 16 years and older, which, as of Q1 in 2016, is only 3.3% higher than it was 37 years ago in Q1 of 1979. Make that an annualized growth rate in inflation adjusted terms of just 0.09%.
The situation is terrible for men. Whatever minimum overall increase in median usual weekly real earnings has taken place during the past four decades for all workers is due entirely to the small wage increase for women. Among males, median usual weekly real earnings are currently 7% lower than they were in 1979.
No wage stagnation in the United States of America?
Keep in mind that the median age of the labor force has increased substantially over these periods, and since older workers should, on average, earn more, the actual wage stagnation is even worse than the numbers above suggest if we were to age-standardize the datasets.