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<p>[QUOTE=&quot;NorthKorea, post: 1979155, member: 29643&quot;]The problem as I see it is you&#039;re looking at the wage progression of a specific individual. The discussion is regarding average wages. In your example, your teenager would be replaced by a different teenager who is willing to work for the flat inflation-adjusted wage. If the oldest employees in the workforce retire willingly, they are replaced by someone else at their wage level. If they are unwilling (or unable) to retire, eventually, they&#039;ll be forced into lower earning jobs.</p><p><br /></p><p>It&#039;s essentially a bell curve where desirability (due to age, experience, knowledge, education, etc) is on the X-axis and wages are on the Y-axis. The area under the bell curve represents the aggregated wages earned in the economic system you&#039;re observing. Inflation will push the curve up the Y-axis, naturally. Since we&#039;re observing average inflation-adjusted wages, the area under the curve would then need to be indexed for inflation and divided by the total workforce.</p><p><br /></p><p>Yes, Johnny might go to college, get his PhD and suddenly be earning $340k a year as a chemist, but Rachel would be trying to earn some money to buy her first used car, a dress for prom or her schoolbooks. Rachel would gladly take Johnny&#039;s old job at whatever wages he earned before moving along the X-axis through increased demand for his services.</p><p><br /></p><p>Now, the only way for the curve to change shape (direction or actual formulaic shape) when inflation-indexed is through innovation. I don&#039;t understand why you&#039;re so quick to dismiss this concept. Either there&#039;s a great disconnect on what I learned or a great-disconnect in what you learned, since we likely have somewhat similar educational backgrounds.[/QUOTE]</p><p><br /></p>

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