With stagnant incomes? Very easy - non-wage compensation.
Instead of giving people money, you give them non-wage compensation (e.g., health care benefits rather than wages, and similar things). That's exactly what happened, in fact - wages are "stagnant", but compensation per hour is not.
Could you please provide a citation for the claims that food and housing prices are going up? I looked, but could only find information to the contrary on food (especially as a proportion of household spending), and very short term, noisy, and confusing information on housing (not house prices, but housing).[1]
The parent was speaking to US nationwide policies and conditions, so nationwide US data would be most relevant, but I would appreciate any illuminating data, as it appears very hard to support the points I initially responded to.
Instead of giving people money, you give them non-wage compensation (e.g., health care benefits rather than wages, and similar things). That's exactly what happened, in fact - wages are "stagnant", but compensation per hour is not.
http://research.stlouisfed.org/fred2/series/COMPRNFB
http://research.stlouisfed.org/fred2/series/LES1252881600Q