Sadly Familiar Statistics
Lou Novak, a friend from the Green Party, posted a link to a page at UC Santa Cruz discussing the distribution of income and wealth in the US. You should go read it; I'll wait...
Anyway, I want to point out that the last 25-30 years, when the bottom 80% of the economy received only 6% of the economic growth, corresponds to a period during which the Federal Reserve used inflation targeting at around a 3% level to set interest rates. Wages are a component of inflation, whereas dividends and capital gains are not.
I'm increasingly of the opinion that the Fed's (mostly justified) focus on maintaining stable inflation has contributed significantly to the stagnation in wages for the last 3 decades: how the hell is the average worker supposed to see any significant increase in income if labor markets tight enough to justify wage increases directly result in interest rates increasing to loosen them?
Another argument in favor of employee ownership...
Categories: Blog, Concentration