There is a wage index used -- don't ask me how it's calculated -- and only for a few years in the late 70s did it rise more slowly than prices. There is no dispute that a switch to price indexing would mean an enormous benefit cut.
mbs There has been a big brohaha lately about the Bushit proposal to change the indexing of social security benefits, from indexing them to wages (the present system) to indexing them to prices. There seems to be universal agreement, both among people who are for the change and people who are against it, that this will lower benefits, because wages rise faster than inflation. But if real wages have fallen over the last 30 years, doesn't that mean by definition that prices rose faster than wages -- and that if benefits had been pegged to prices, the last 30 years, they would have risen faster too? Michael
