Nice charts. Of course, all we need to do is look around us to see that real wages have increased which is the only logical explanation for why consumption continues to grow. You doomer's can never manage to explain how it is our net worth continues to rapidly increase if we're relying on debt to drive all this consumption.
"Moreover, real earnings of the average worker have continued to rise. Over the past century, per capita real income has risen at an average rate of more than 2 percent per year, declining notably only during the Great Depression of the 1930s and immediately following World War II. Incomes trended higher whether we had a trade deficit or a trade surplus and whether international outsourcing was large or small.""Productivity in the United States has increased generation after generation, creating ever-rising standards of living. This trend has persisted whether our competitive advantage came from the development of more efficient technologies in agriculture, textiles, and steel, or, more recently, from the design and fabrication of microprocessors and the harnessing of the human genome. Our knowledge-based skills in a business environment, supported by a rule of law, have enabled our workforce to create ever-greater value added--irrespective of what goods and services we have chosen to produce at home and what and how much we have chosen to import."
"The fact that, over the years, more than 94 percent of the workforce has been employed, on average, indicates that U.S. workers apparently have been sufficiently skilled and motivated to learn the new tasks that enable them to earn, on average, an ever-rising real wage."
Greenspan: FRB Speech
From Stephen Moore:
..."Some critics have even trotted out contorted statistics which suggest that workers have made almost no income gains since the late "70s. It's a grim picture that suggests that the best days of the American worker are behind us and that The Brady Bunch lived better than Bart Simpson's family does today. But the reality is that the economic well-being of the American family has never been better -- as measured by income, consumption, and wealth.
The typical household today has a disposable income higher than any other time in history, and when taking into account all forms of benefits that workers now receive, compensation to workers is about 27% higher in real terms than 25 years ago. Workers earn in less than four days a week what their parents earned in five, and they make in three days on the job what their grandparents earned in five.
Why have wages only crept up since 2000 during this era of unprecedented productivity gains? Most of the answer, according to Diana Furchtgott-Roth of the Hudson Institute, is that a large share of worker compensation is in the form of non-wage income. Wages have inched up by 4% since 2000, benefits are up 16% and total compensation is up 7.5%. Employers are now offering a much wider range of benefits to workers than ever before: 33% of all firms now offer long-term care insurance; 42% offer telecommuting; 82% school tuition assistance; 62% flexible work schedules; 31% adoption assistance; and almost half paid military leave."
"Another reason that workers today have made substantially greater economic gains than the wage data may suggest is that more Americans than ever derive income and wealth not purely from labor, but from ownership. Between 1980 and 2005 the share of Americans who are workers/stock owners has doubled from 25% to 52%. Since 1980, shareholder wealth has increased by about $15 trillion. Those wealth gains used to be hoarded by the wealthy, but thanks to innovations like 401(k) plans and IRAs, the wealth gains from the American bull market have been further democratized and the dividends have been spread more widely to middle-class America."
Wages of Prosperity
Here's another good article that debunks the myth of wage stagnation:
"Wage stagnation is an old statistical hoax whose time is coming to an end. When the average earnings series is at last given a well-earned burial, after suffering a lifetime of statistical abuse, what will all the gloomy worrywarts then find to write about?"
Unreal Wages
Even without all this information, you cannot explain how our household net worth is growing by leaps and bounds if we are not truly becoming wealthier. The net worth numbers take into account all consumer debt including credit cards, mortgages and home equity lines of credit. How can you possible think that wages are stagnant and we are up to our elbows in debt when our net worth is growing like it is?
