THE REAL STORY ON WORKER COMPENSATION

The next time you hear a U.S. politician or pundit lament that "average real hourly wages" have declined, don't be misled. The average real wage is a fundamentally flawed measure of the well-being and progress of American workers for three reasons:

• The real wage does not include benefits.
• It relies on cost-of-living estimates that have tended to systematically overstate inflation in recent decades and thus understate gains in real earnings.
• Real wage numbers are often compared to previous peak years, a practice that tends to minimize longer-term upward trends.

Although the average real hourly wage paid to American workers is lower today than in the 1970s, says Griswold, average real hourly compensation, which includes benefits such as health care and 401(k) contributions, has gone up. Since 1973, average real hourly compensation for American workers has increased 45 percent, according to the Bureau of Labor Statistics.

[this is the perennial canard of 'wage stagnation' - the reason paycheck increases stagnate is because every year government adds to the cost of employing anyone, be it mandated benefits or an ever-growing host of regulations that must be paid for]

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