Why are real median household incomes stagnant?

because official government published inflation statistics are just as artificial as the fiat currency value they intend to measure. according to those statistics, "a loaf of bread" has gone up in price dramatically in the last 100 years. but realistically, i think it would have cost hundreds of dollars to get a loaf of bread of the same quality and consistency as cobblestone bakery's "million dollar white bread" way back in 1916. that simple everyday example doesn't even begin to account for the price of important stuff like pharmaceutical grade penicillin.

it is unfortunate that people use the word "real" to refer to inflation-adjusted numbers, as if they are somehow more realistic. life is getting better due almost exclusively to technological advancement. that advancement makes everyone richer. arguably, it has been more useful to centralized systems (e.g. governments and large corporations) in the past few thousand years. however, i for one am hopeful that the next few hundred years will be characterized by more decentralizing technology (e.g. the internet, bitcoin, etc.) that will be more beneficial to the "common man".

It's good that you included "labor-economics" and "wages" in your tags.

The basic answer to your question is that activities like "having a job" - which is how most households earn most of their income - are simply less and less effective a means of "acquiring wealth".

Piketty explains it brilliantly in his book "Capital In the 21st Century".

Here is a very good summary by Robert Solow, in the New Republic:

• https://newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed

Three points - one which has already been raised much better by denesp:

1. Are household sizes the same (we see the answer as no)? How about amount of earners per household?

2. What about the amount of goods and services that these household incomes can buy? Should wages be increasing if a dollar can get more goods and services, thanks to technology? Many people like to discuss the rising costs of goods and services, but if you compare a house from 1960 to today (for an example), the amount of amenities a house has today is insane compared to 1960 and we'd expect the cost to rise. It's important to highlight that we're not comparing apples to apples from the past to today thanks to technology.

3. If you look further at statistics you'll see the people move in an out of income categories, so maybe the median has remained the same, but the other levels are increasing (FT had a graph showing other income brackets below and above median are rising). Given that any particular person will be in the top 30% of incomes at some point in his/her life (usually in the late 40s to early 60s at career peak), we should be looking if the income stagnation has occurred at these levels as well - that would be a possible cause for concern. Median household income being about the same might be a normal statistical event (though the household size decreasing indicates that these incomes are not stagnant and thus it's a little abnormal).

This is just a suspicion of mine but the following might be a factor. Please feel free to comment:

Due to technological advancement the composition of the workforce between skilled and unskilled workers should have shifted dramatically over the last few decades. Employers would now seek many more skilled vs unskilled employees. I have not run any analysis on this as of yet but I suspect that due to the ease of attaining a higher education the market is getting saturated with skilled workers, outweighing the increase in demand for skilled workers. - The massive increase in university attendance that I suspect might also be due to the current perception that you need a degree to earn good money. A few decades ago it was a luxury to go to university, now seen almost as a requirement for success.

Due to the oversupply of workers for the 'higher paid jobs' that rely on university education, the average wage for these have steadily decreased.