EX: in the short run --10 minuets of your labor is worth $2.00 and you used to be able to buy an Asylum Film DVD with it, but now the DVD costs $2.03. In the long run you are paid $2.03 for 10 minuets of your labor, and now you can buy that DVD)
right. thats not what adjusted for inflation means in the example on wikipedia and it's also wrong. adjusted for inflation means they have taken what your paycheck bought in 1930 and compared it with what it buys today and shown wether it buys more or less. your actual check isn't "adjusted for inflation" the STATS are.
Suppose we didn't have inflation (i = P) for five years, what would happen to nominal wages (W), would they increase, or decrease?
ostensibly they would stay the same but they would probably increase because going that long with no inflation woudl be a sign of a healthy economy. for most of our countrys history we had virtually no inflation. an ounce of gold was 20 dollars in like 1790 and still 20 dollars in 1920.
there's been policy mandates that have weakened the scope and bargaining power of unions
I think thats putting the cart before the horse. If times were good companies generally would have a hard time attracting quality workerers with low salaries.
IN the end I think our divergent views of what happened it Detroit are the key. You feel it was the unions losing power and outsourcing coming into play. I feel it was the unions driving manufacturing out of the the city and we are lucky China and other countries are willing to make us cheap stuff or we would really be up a creek.
at any rate, wether you feel the chicken came before the egg or vice versa, all of this is fueled by our governments propensity for spending and inflating, which takes money and economic oppurtunites out of the economy and transfers them into wasteful stuff they control. without our massive warfare state conversations like this would be nitpicking in an amazing and robust economy.