The idea of paying people based on an hourly rate or for a fixed salary is too easy to exploit. It assumes that employers are virtuous and will give raises at a rate comporable to the rate of inflation. As we all know, businesses are anything but virtuous.
Hourly rates turn your time into a commodity and are all balanced for workers to maintain the 40 hour work week status quo. It's reductive and forces the worker to prioritize spending time at work rather than trying to live a fulfilling life. With this in mind, a yearly salary sounds like a nice alternative and it's often used as bait by recruiters looking for employees but is just as a exploitative. I know far too many people who have been hired on for salary positions only to wind up being required to put in 60-70 hour work weeks.
I think if proper work reform is to happen, other models of compensation need to be considered. I'm not sure what the proper solution is but I've heard of other ideas. In some countries, hourly rates aren't flat but instead are modeled as “minimum wage + $X”. This still forces employees to prioritize time at work but at the very least, it can help keep wages up with inflation assuming the minimum wage is actually being kept up.
Another model that could be looked at is commision. I'm starting an installer job next week that doesn't pay salary or hourly but instead, we're paid 8.5% of the cost of every job we're sent out on. I've talked with a lot of the people at the company and they prefer this method since it means efficiency is rewarded and wages will naturally raise with inflation.
I'm not sure what the answer is but I'd love to hear other suggestions.