5% is not arbitrary. It is removing massively skewing outliers who also see a massive growth outlier compared to everyone else.

Looking at wage movement as slices of where one falls gives a clearer picture.

Additionally, the reason it doesn’t make sense to remove low wage outliers while removing high wage outliers for average is because the median wage is closer to low wage outliers than it is to high wage outliers.

For example, if you take the median and then +- for your dataset (if median is 48,000, then use 0 thru 96,000), you’ll be removing more than just the top 5%, and yet, this also gives a far far far better picture of the dire economic position and what is happening with real wage movement.