> Inflation is measured against a basket of goods - but those goos also increase in value, i.e. a tomato in 1985 may not be actually the same thing as a tomato in 2017 - if it's riper, nicer, healthier (not saying they are, but could be) - well, that's 'real' improvement, so it's not the same thing.

This. Every time I hear wage growth stagnation all I think of is this.

$1,000 in 1977 buys a whole hell of a lot less VALUE than it does in 2017. Computers, phones, cars, furniture, clothing...the list goes on. Component prices have gone DOWN value (technology) has gone UP in many of the categories that people spend their wages on.

Sure if you measure the price and value of a can of coke or a pork rind and compare it to wage growth the picture doesn't look great, but it ignores all the things that have vastly improved on the value side.

In a category like "computers" in 1977 vs. a smartphone in 2017, both cost roughly the same and so are mentally "weighted" equally in the wage growth stagnation equation...but that causes us to ignore the huge amount of time VALUE you get back in your life with a smartphone -we assign that essentially a value of zero.

Its just doesn't make any sense to me. If we contracted that time line and said..."you get paid the same in 2016 as you did in 2017, but in 2016 you have a computer that costs $1000 and plays pong on a black screen and in 2017 you have an iPhone X that costs $1000 and basically makes you a living cyborg and folds your laundry"...I think the value increase would be immense and obvious and the wage stagnation sort of immaterial. But something about the passage of time makes this point invisible.

If I was making exactly the same nominal value in 1977 as I am in 2017, and things cost about the same (if not less in many cases) the amount of value my money extracts is far far greater today than it was then. None of that seems to get captured by just saying...the rate of dollars people get paid doesn't rise as much as we like.