The Stagnating Middle Class?

It has become accepted wisdom among the pundit class that outside of the wealthiest few, the majority of Americans have seen their economic well-being decline over the past decade, and in fact, over the past few decades. They routinely point to data which indicates that the average income of households in the US has not changed much since 1973. See the image below.



However, in this article, Steve Chapman points out some of the flaws in this prognosis. To me, the most important point that many seem to miss is that compensation includes much more than wages, so measuring wages alone gives skewed results about compensation changes.