[aaomidi]

This graph has a weird starting position. If this graph started, maybe 30-40 years before that, you'd see it telling a very different story.

The reason it's sliding for decades is that the purchasing power of that same money has gone down. Why? Housing. Housing is not calculated in inflation rates, annnnd everyone needs a house.

So yeah, the REAL compensation has been sliding down due to no real growth there while housing has skyrocketed. AND that before 1965, we actually did have significant wage growth.

So, this is one of those cases where the data is misleading.

[sokoloff]

> Housing is not calculated in inflation rates

False. https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...

Shelter (the service that a house provides) is included as a consumption item in the CPI figures (and, as any adult would expect, has the largest weight of any of the 211 items that constitute the CPI basket).

You can see the significant changes to the calculation methods detailed here: https://www.bls.gov/cpi/research-series/r-cpi-u-rs-changes.h... The rent equivalent method for owned property has been in use since 1983. (Prior to that, housing was included in CPI, just with a different method.)

[aaomidi]

I mean, this is assuming the living standards (how many people to one house) has remained the same. That also has changed.