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Stocks and wages

from David Ruccio


The new jobs report is out and, once again, little has changed—including wage growth (the blue line in the chart above), which for production and nonsupervisory workers was only 2.3 percent. 

That may not be good for workers but their employers and stock-market investors couldn’t be happier. The Dow Jones Industrial Average (the red line in the chart above) continues to soar, on the expectation of higher future profits.


Just in the first couple of hours of trading, the average was up more than 58 points.

  1. Reiner Buchegger
    September 6, 2017 at 2:29 pm

    The two lines are rather incomparable because of the non-comparability of the scales!

    • Risk Analyst
      September 6, 2017 at 5:16 pm

      They are in percent terms from a year ago, so I do think in that respect they are comparable. There are some other subtle things going on however such that the wages are per person while the stock index measures a growing aggregate that increase with labor productivity and population. I think he is just trying to nudge the reader toward the Kalecki kind of thinking with the capitalist class vs. the workers kind of going in different directions here. It is kind of dramatic.

      • Risk Analyst
        September 6, 2017 at 5:20 pm

        On second look, you are right. I was looking at a zoom that left off the right hand side reference to “index.”

  2. patrick newman
    September 9, 2017 at 9:53 pm

    It appears to compare growth in wealth and growth in income – i.e. an indicator of inequality rather than a measure.

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