What is Alan Reynolds talking about? (Inequality edition)

Writing in today's Wall Street Journal, the Cato Institute's Alan Reynolds attacks the ongoing New York Times series on inequality:

To deny progress, the Times series claims that "for most workers, the only time in the last three decades when the rise in hourly pay beat inflation was during the speculative bubble of the 90's." Could anyone really believe most workers have rarely had a real raise in three decades? Real income per household member rose to $22,966 in 2003 from $16,420 in 1983 (in 2003 dollars)--a 40% gain.

This is an obviously bogus argument. Given the well-documented surge in income for those at the top of the income distribution, real income per household member (a mean in the statistical sense) would go up dramatically even if everyone else's wages were stagnant. In addition, real income per household member will necessarily increase as more women enter the workforce. Finally, Reynolds is comparing apples and oranges -- the sentence he criticizes says workers didn't gain much relative to inflation before the 1990s, then he uses 1983-2003 data, which includes the 1990s, to claim that the Times is wrong.

And if we look at the data, we find that the Times statement is, in fact, correct. Consider this table (PDF) from the Economic Policy Institute, which lists the inflation-adjusted salaries of workers in the 10th, 20th, etc. percentile of the wage distribution from 1973-2003. And, sure enough, the distribution of workers' wages was largely stagnant from 1973 to 1989 before rising during the 1990s. So what is Alan Reynolds talking about? Does he even know these data exist?

(Note: When speaking about wage or income distribution data, it's important to distinguish between the changing distribution of wages/incomes and changes in wages/income over workers' lifetimes. The Times is clearly talking about the former, and while it's possible that Reynolds means to refer to the latter, the real income per household member statistic that he uses seems to indicate that he's talking about changes in the distribution.)

Comments

[Alan Reynolds]

One of the New York Times articles I dealt with misused IRS data to claim that real incomes (not just wages) had fallen for 90 perent of households(actually, taxpaying units) between 1980 and 2002. The quote above said wages of "most workers" fell almost continuously for three decades. Neither median household income(census.gov) nor real compensation per hour (bls.gov)confirms such transparent nonsense. The wage series the New York Times probably used is being discontinued by the BLS because it's absurd.

The EPI figures purport to measure hourly wages("based on authors' analysis"), which excludes benefits and probably salaries. Yet even those dubious figures do not show any decline from 1980-2002 or 1973-2003 for any of the deciles, much less for nine out of ten.