Cause-and-Effect Reasons for the Lack of Wage Growth in our Macro-economy

The Fed seems to be perplexed about the lack of wage growth in today's economy. Barry Ritholtz on Bloomberg Radio did an excellent interview recently with former King Broadcasting CEO Stephen Clifford that explores one hypothesis behind this issue. Here's a link to the accompanying interview article and podcast; https://www.bloomberg.com/view/articles/2017-08-29/how-to-know-when-a-ceo-is-overpaid

Interestingly, having just finished David Stockman's book 'Trumped! A Nation On The Brink of Ruin And How To Bring It Back . . .' the author graphically illustrates the lack of real wage growth for the 'middle income household' going back to the late 20th century.

Coincidentally, there's an article in the Harvard Business Review (September 2014) that does a good job of bringing these two perspectives together. Here's a link to the article: https://hbr.org/2014/09/profits-without-prosperity

The case seems very compelling; the correlation, strong. However, until corporate boards and more importantly, shareholder owners take an advocacy stand for increased employee wages at the expense of CEO compensation and share buybacks the situation will remain as the French say, plus ca change, plus c'est la meme chose.

- Bruce Angeli