The chart doesn’t mention the main reason for the fall: unusually high inflation. Since inflation is running at a 4% clip right now, you’d need wages to be rising at the same rate in nominal terms just to stay at zero on this chart. If food and energy prices stop rising at some point, real wages will start looking much healthier.
Of course by the same token, if prices started falling dramatically, then even a small pay cut would really be a pay raise. But what we have is the inflation uptick, and with it falling real wages for everyone who doesn’t get at least a 4 percent raise this year, a problem that we hope won’t be afflicting the all-important political blogging sector.