Nice chart. However, it doesn't verify InAlienable's statement nor does it disprove my statement. Wages were flat before the undocumented worker population exploded.
I can't speak for someone else's claims but I think he's talking about under-the-table and blackmarket earnings which would be impossible to quantify.
But as far as wages being flat; if we're talking real wages as in your graph, they are supposed to stay flat or level assuming stable labor supply/demand. Real wages represent the adjusted for inflation purchasing power of nominal wage values so increases/decreases in real wages relative to consistent units of labor output would suggest a contraction/expansion of the money supply with deflation/inflation of the currency. In other words, fluctuations of real wages all else being equal are a troublesome sign of monetary volatility.
Receiving equivalent real value compensation for equivalent labor output over time is perfectly reasonable and efficient.
Wages should at least stay even with inflation, the fact that this didn't happen, per the drop in Real Income from the early 80's. Today, a wage earner is earning less in Real Dollars than they were in 1980, yet the uber wealth realized growth in their Real Income through that same period. Who controls wages?
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Three years and new fault lines threaten - FT.com
In his book, Prof Rajan points to domestic political stresses within the US. Related stresses are emerging in western Europe. I think of it as the end of “the deal”. What was that deal? It was the post-second-world-war settlement: in the US, the deal centred on full employment and high individual consumption. In Europe, it centred on state-provided welfare.
In the US, soaring inequality and stagnant real incomes have long threatened this deal. Thus, Prof Rajan notes that “of every dollar of real income growth that was generated between 1976 and 2007, 58 cents went to the top 1 per cent of households”. This is surely stunning.
“The political response to rising inequality ... was to expand lending to households, especially low-income ones.” This led to the financial breakdown. As Prof Rajan notes: “[the financial sector’s] failings in the recent crisis include distorted incentives, hubris, envy, misplaced faith and herd behaviour. But the government helped make those risks look more attractive than they should have been and kept the market from exercising discipline.”
Three years and new fault lines threaten - FT.com
In other words your theory favors the upper income tiers, where as the "working class" spins it's wheels and goes nowhere. And some people wonder why 60% support the Buffett Rule? I would tend to guess that the fiqure of 60% would be made up of mostly the wage earner, who has been losing out for over three decades. This is also the group that a nearly all of the proposed spending cuts per Paul Ryan's plan would effect. In other words, a continuation of the one-way-street the working class demographic has been forced to follow for over 30 years.
