>Real income hasn't risen for the median worker in over a decade. Nobody knows how to fix this.

The fix is as simple as sufficiently progressive taxation to make the median worker's income track the productivity growth of the economy. The fact that we have made the political choices not to follow that path (as opposed to the Scandinavian countries) is a different matter, but there is no doubt as to the ability for the government to fix the problem you laid out.

How does a (more) progressive tax system increase real median wage?

Envision a distribution where the median is far lower than the mean. (I think median in US is mid-50's, average is mid-70's.)

Then imagine what it takes to bring the median closer - you have to squash the curve (make it more progressive). You can either lop of the top end, shore up the low end, or do some combination of the two.

To get a sense of just how progressive the tax system could be, consider the rule of thumb that the value of money is roughly logarithmic.

Logarithmic tax systems have been designed - here's a simple one as a thought experiment. They call it the logarithmic flat tax. First, figure out your yearly revenue. Then, figure out how many times the poverty rate your income is. Then take the log of that number, and then multiply it by a certain flat constant that would be the same for everyone (to get the amount of tax revenue the united states needs for instance - for the united states, that would be around 9). The resulting number is the percentage of your gross that you should pay in taxes.

If you apply that to all individuals and businesses, then you have a progressive tax system that is basically equal in terms of how much it "hurts" for every payer (the value of money being roughly logarithmic). Hint, it's probably much lower than you are currently paying unless you are Apple or Exxon. Last I checked, Bill Gates roughly pays an appropriate amount.

When combined with meaningful social benefits (like healthcare and daycare) and/or a negative income tax (like the earned income tax credit), it lifts the effective post-tax median wage.

Recommend Robert Reich's "Inequality for All" on this subject: http://www.imdb.com/title/tt2215151/

> Real income hasn't risen for the median worker in over a decade.

Pretty sure it's closer to four decades.

> Nobody knows how to fix this.

Everyone who knows even a little about fiscal policy and it's effect on distribution of gains in the economy knows how to fix it, which is the mirror image of how it was achieved (reduce the degree of additional taxation imposed specifically on both paying and recieving wages, which discourages employment and reduces the returns that are retained by those who are employed.)

That an insufficient number of people choose to act on that knowledge is not because the knowledge is missing, it's because people in power want to preserve the result you seem to view as problematic.