To me the problem is simple plumbing. You cannot get more water out of a pipe than goes in. IN means income: wages, earnings and new debt. (Debt isn't traditional income, but that is the way we use it now. Think credit cards.) OUT means spending: debt repayments, purchases, losses, taxes.
What has sunk this economy has been the demanding of faster OUT than IN, along with constrictions on the IN. Insufficient wages for those who really work, while those who can give themselves fat income do so at will, has distorted the system until it is now breaking. Those who sold impossible mortgage terms were trying to ride a horse without feeding it (OK, sudden metaphor change, but same idea.) Now the horses (that's ordinary people trying to get by) are dying. So beat the horse, of course. Duh!
Illegal immigrants would Not be a problem if they were paid fairly, so blame those who set the wage. "Market forces" alone blindly gravitates toward slavery. (Why do you think slavery dominated human history? Amoral market forces, which includes "get away with what your advantage permits." Also unfettered competition, which says "if you don't do it, the other guy will, and he'll win.") Morality must control market forces, else capitalism will have painful corrections, including full-blown revolutions in extreme cases, like maybe soon.
Full-time work, no matter how lowly the job, should support a nuclear family (traditionally a couple with 2 children) at more than a meager subsistence level. (Those who want more should be free to seek it; I'm talking floor here, not ceiling. Some argue that mandating a floor is communist or socialist, and destroys the "freedom to fail." No, if one refuses to work or is profligate with their income, they can still fail. But we should not allow the "freedom to be a slave.")
Basic needs are food, transportation and housing. Food is not a major problem yet; housing is where we have shot ourselves. Rents and mortgages are "what the market will bear," set at-will, and are often outrageously profitable for those who have the advantage. (With taxes, sometimes it's the government that gets much of it.) Until they get so greedy they suck the pipe dry, which is exactly what we are seeing. Then they piously foreclose/evict, often destroying real physical assets in the doing, expecting someone else to be eagerly waiting to pay their price. Total lack of humanity, legally enforced. (Some renters retaliate by destroying property. That really helps no one, but can be a cry of the powerless.)
Another foot that kicked the legs out from under this economy was the spike in transportation cost, specifically the price of gas. Many have no choice but to drive quite a way to work. Income stagnant, costs sharply up, IN ≠ OUT, does not work after pipe empties. Those with small pipes fail first, but this time it was enough to notice.
Other basic needs are some disability insurance, preventive and catastrophic health care, and old age support. Our market-place solutions for these needs are beginning to fail even those who have access. It has never even reached many, who have to appeal to a parallel moral system of charity (NOT a market-forces system). In other words, the whole amoral capitalist system is failing for fundamental reasons. Until now we have just refused to admit it. Now we have to.

CLUELESS! PATHETIC! And I'm being quite civil.

Inflation is the devaluation of your dollar and the direct result of the "Fed" a private bank with the ability to print money out of thin air.

Think Monopoly money fella.

Our dollar, as a result is worthless.

Second, the government uses Hedonics, weighting and substitution to calculate inflation. You buy steak today, tomorrow you cant afford it so it says those hotdogs you bought that were cheaper and thus inflation went down.

Social Security amounts are predicated on inflation rates. Inflation is really much higher, see shadowstats.com

This problem is not fixable. All Fiat currencies revert to zero and that is where ours is heading.

How could anyone have a discussion with the collapse of wages in the United States without addressing the elephant in the room? ... ILLEGAL ALIENS!!!

Entire sectors of the workplace have seen their wages drop into free-fall with the influx of cheap illegal labor. Make no mistake, I'm not talking about fast-food. Industries that once offered a ticket to the middle class are gone.

Meat packers in the mid-west who, 30 years ago, earned $20 an hour with good benefits now make $8 with few benefits. Is it any coincidence that this industry is now virtually 100% Latino, most if it illegal? Entire Latino communities, like old company towns, have sprung up in places like Nebraska and Iowa.

Construction wages are in free-fall. Good jobs as dry wall hangers, framers, concrete workers, roofers, landscapers, painters and laborers have been taken over by low wage, illegal labor. During the massive construction boom in North Carolina it was possible to read the help wanted adds for weeks at a time and not find a single add for these jobs.

Wage pressure on employers is IMPOSSIBLE as long as there's an ENDLESS supply of willing workers south of the Rio Grande who are ready, willing and able to migrate to the United States and work for less, a lot less.

I do not understand why cutting corporate tax rates is not part our economic stimulus conversation. Make US goods and portable services more attractive on foreign markets, as well as attracting investment. I agree with Cesar (1st comment) that very little of the commentary has merit. The man answered his own question in his opening premise, inceased labor supply (women) has tamped down wage growth.