Prof Paul Krugman posted the following chart in the New York Times (2012, July 18) showing long-term stagation in US real working wages since 1970.
The chart above begs the question: What happened in 1970 that changed the course of real working wages in the US? We know that the US went off the gold standard during the early 1970's. We also know the US went through an oil embargo during the early 1970's. Do these occurences explain why US real working wages have stagnated over the past 40 years? If not, what other explanations should be considered? The answers to these questions are fundamental to understanding the many economic challenges that America has endured over the past 40 years...
Source: Krugman, P (2012, July 18, 2012), Compensation, Too, New York Times.