When Median Take-Home Pay Packets Only Rise Once a Generation for a Half-Decade Span: CHART OF THE DAY

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We have built an economic régime where GDP climbs, markets soar, and the typical worker stands still unless the labor market is white‑hot. And if inflation fears keep us from ever running the economy hot again, real median wages may be stuck on pause indefinitely…Ernie Tedeschi:ShareErnie Tedeschi: <https://twitter.com/ernietedeschi/status/2061436733464465727>: ‘Once you sort through demographic change & use a consistent deflator over time, the story becomes more interesting: periods of stagnation to real median wages (1973-95, 2000-14, maybe now), followed by bursts of growth when we’re near full employment (1961-72, 1996-2000, 2015-22).There's real wage stagnation among workers with less than a BA, however the problem is that the type of worker who gets a BA or beyond is much, much broader now than it used to be. Successful workers have been increasingly sorting by education, and education in turn has an effect…Give a gift subscriptionThe way I was taught macroeconomics, there was a clean story. There was long-run growth—output per worker and thus living standards ratcheting upward at something like 2 percent per year—and then there were business cycles, with unemployment and output bobbing above and below that smooth trend. Wages, in that classroom story, were just the labor side of the same process: track productivity plus inflation and you have the typical worker’s paycheck. The path might be noisy, but the fundamentals were solid.It is very hard to look at Ernie Tedeschi’s graphs and still believe that story for median real wages. Once you stop confusing “average” wit…