Since there's a lot of discussion of the issue in this morning's thread, here's some historical data on the so-called "going rate" in New York City (The process by which national firms started paying NYC salaries to first year associates in other cities was long and convoluted). I'll also list the median household income in the US in that year. All figures are in 2010 dollars.
1957: Going rate in NYC: $41K. Covington and Burling in DC was the highest paying firm in the country, starting associates at $49K. Median household income in the US was $37K.
1967: Going rate in NYC: $65K. Cravath caused much hand-wringing about Kids Today by bumping that to $74K the following year. Median household income was $48K.
1977: Going rate in NYC was $100K. ($70K in LA and $85K in DC). Median household income was $47K.
1987: Going rate in NYC was $123K. Cravath had again moved the market in a big way in the previous year, when the going rate had been $102K. Median household income was $48.5K.
1997: Going rate in NYC was $116K, although SCOTUS clerks and similar Advanced Life Forms were getting $136K. Median household income was $51K.
2005: Going rate in NYC was $138K. Median household income was $53K. In the fall Cravath bumped it to $160K in 2010 dollars, and here we are today. (Median household income has fallen to $49.7K).
Obviously the huge run-up was in the quarter century from the late 50s to the mid 80s, when starting salaries at top NYC firms essentially tripled in real terms, even though national household income was basically flat for all but the first few years of that time period (and has remained flat since.). The growth in associate salaries in the 25 years since has been comparatively modest. Note that until the sudden bump at the tail end of the housing bubble associate salaries were only about 10% higher than they had been nearly 20 years earlier. (Partner compensation is another story altogether).
And of course law school tuition has increased by a factor of three to five times since the mid-1980s. To put it another way, 25 years ago three years of private law school tuition equaled 35% of the going rate. Today it's just under 100%. Public law school tuition has gone from 8% of the going rate to 35%. Increasingly, it seems like the goal of many of those among the tiny percentage of law graduates who get big firm jobs is to live like monks for five years, while clocking insane hours doing mind-numbing work, simply in order to pay off their law school debt. And then? (It appears that the days of big firms making concerted efforts to "place" their departing associates are mostly gone.)