“50 Years Of Growth In American Consumption, Income, And Wages”, 2017-05-16 (; backlinks; similar):
Despite the large increase in US income inequality, consumption for families at the 25th and 50th percentiles of income has grown steadily over the time period 1960–552015. The number of cars per household with below median income has doubled since 1980 and the number of bedrooms per household has grown 10% despite decreases in household size.
The finding of zero growth in American real wages since the 1970s is driven in part by the choice of the CPI-U as the price deflator (2008, Prices, Poverty, And Inequality: Why Americans Are Better Off Than You Think). Small biases in any price deflator compound over long periods of time. Using a different deflator such as the Personal Consumption Expenditures index (PCE) yields modest growth in real wages and in median household incomes throughout the time period. Accounting for the 1998 and 2001 estimates of CPI bias yields estimated wage growth of 1% per year during 1975–402015.
Meaningful growth in consumption for below median income families has occurred even in a prolonged period of increasing income inequality, increasing consumption inequality and a decreasing share of national income accruing to labor.