I feel like you're mixing inflation-adjusted and non-inflation-adjusted measures. The inflation that the Fed tries to maintain is (as far as I can tell) a legacy artifact based on the financial tools available in our system.
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If you inflation-adjust everything, you see some goods getting more expensive and some getting less, and wages being ~flat. You also see income skewing towards the top. So people on the negative side of that skew experience falling standard of living.
I don't disagree with any of that. But my point is that we try very hard to steer the average of the distribution along a course of low positive inflation. Since that's an average, some people win, some people lose. Maybe income inequality means that more people lose over time,
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which is interesting and something I hadn't thought of.
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