Max B. Sawicky wrote:
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.
The stats on this are available at the web page of the SSA trustees annual report: <http://www.ssa.gov/OACT/TR/>. There's a variable called "real wage differential," which is difference between the increase in the "covered wage" (the average earnings of workers covered by the SS program, which is a very broad universe) and the CPI. It was negative for quite a few years between 1970 and 1995, and averaged just +0.5% a year for that period. Over the whole 1960-2004 period, it averaged +1.1%. Amazingly, though the trustees project a big dropoff in productivity and labor force growth, and therefore in GDP growth, they project no drop in growth in the covered wage - it's still slated to grow 1.1% a year.
Doug
