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That said wage gains are a recent trend and a short one at that.  A report by The Economic Policy Institute shows that wages have only increased on a real or adjusted for inflation basis for the top 5% in the last 46 years with a cumulative gain of 51.4%.  The median wage on the other hand has declined 4.6% over the same period and ending in 2015.  In fact this figure is actually worse as what gains there have been are skewing the median higher as they have accrued to the top 5%.  Looking at wages as a percentage of Gross Domestic Product shows that wages as a percentage of GDP have hit a 46-year low of just 42.5% a good 7.5% below the level seen in the 50’s, 60’s, and 70’s.  In Dollar terms this works out to 1.35 Trillion or $13,500 per household of lost spending as per Federal Reserve Data.  Is it any wonder that consumer debt levels increased steadily in the last 30 years or so as your average American tried to keep up?  Nor is it any surprise that we find ourselves in the pickle were in today.

This is Caleb Lawrence Registered Investment Adviser Inc. Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

You can catch me on the radio at noon each business day as well on California’s central coast.  KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.

Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.


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