D-Bood clearly has this right. To review:
1. By most measures, real wages are up slightly since 1976. If anything, these measures understate the actual increase in consumption by a lot. How much did your hipster OWS kid's MacBook Pro cost in 1976? How about his iPad? How about his MP3 player? (Hint: infinity, infinity, infinity). Stuff has gotten WAY better, and cheaper at the same time. Attempts to control for hedonics, quality change, and innovation are notoriously difficult. How would you build Moore's Law into a CPI adjustment, when it implies prices of computer power are constantly falling at a rate of more than 25% per year? But these clearly lead toward understating the effective real wage increase. Even if I only have a minimum wage job, I can save up and buy an iPod. In 1976, I could not.
So, for example, here is the cost of a 1-gig hard drive (picture for RAM same dynamic):
Check this RAM chart out. It even freaked me out a little bit, and I'm an optimist already. Wow, does RAM ever get cheap!
2. Health care benefits have soaked up real annual gains of 4% or more, on average. If you include total compensation, not just wages, workers have gotten huge gains. (Of course, this is a problem, but it is a DIFFERENT problem than the one pointed out by Dr. Reich.)
3. It really is absurd that people think wages have not gone up, for John Smith the worker, hired in 1976. He makes a LOT more now (though he may have lost his job, which is a DIFFERENT problem than the one pointed out by Dr. Reich). Wages rise with job tenure, they just do. John Smith makes pretty good money now. The new guy just being hired, sure, he doesn't make much more than John Smith did in 1976, adjusted for inflation. Not sure why that is surprising, or even bad.
(UPDATES: a. Joe Thacker is right. Immigration and women entering the work force are huge factors. b. On the video on YouTube, a commenter said something so true and funny I peed myself: "I agree with this guy but it looks like he took 3 hits of acid before doing the vid." Yes, friends, it is true that D-Bood is likely to be cast as the psycho-murderer, not the RCMP hero.