On Mon, 14 Feb 2005, Max B. Sawicky wrote:
There is a wage index used -- don't ask me how it's calculated --
But Max, how can I not?
And lord, if you don't know, who does?
and only for a few years in the late 70s did it rise more slowly than prices.
Rather than having a different wage index, wouldn't it be more likely that they were using the same figure as the BLS uses for nominal wage rises, but that they were using a different index for price rises?
For example, maybe the BLS uses the GDP deflator to calculate real wages, and Social Security uses the Consumer Price Index to calculate prices rises? (My impression is that the GDP deflator is a broader index which includes producer prices, so that these can diverge substantially.) And then if
the GDP deflator rose faster on average annually than Wages which rose faster on average annually than the CPI
you'd end up with this result, of real wages falling, but nominal wages rising faster than the CPI.
Michael
