A Feel Good But Deeply Ailing U.S. Economy

Stagnant Salaries

Get comfortable with your salary, because it isn’t going anywhere positive–payrolls are stagnant!

The Wall Street Journal reports that wages since the recession “have grown slowly, advancing at a pace of about 2% annually” for a total of 12% since 2009.

In contrast, in the 20 years prior to the recession, wages “grew on average better than 3% annually”–that’s 50% more increase per year!

Sure some of the increase is now coming in the form of benefits growth, such as time off, subsidized commuting costs, and health insurance premiums, but workers still need to be able to pay their bills.

For the federal workforce, things have even been worse with pay raises of “just 2% [total] over the last five years” and a proposed 1.3% (with locality pay) for 2016.

Is it surprising then the innovation–one of our greatest strengths–is also drastically slowing in the United States. We are not rewarding risk with reward like we used to–and that changes the whole innovation equation!

Also no surprise then that mergers and acquisition are booming as the key to corporate growth as well as cost-savings through economies of scale are seen as one of the only ways to wring out profit growth in companies bottom lines.

All in all:

– While inflation is up an average of 2.13 over the same 10-year period.

– This leaves the average household more than 6% worse off then they were a decade ago…that’s a lot of time to be working and getting negative returns on your investment of time and effort.

Combine this with:

– Manufacturing down to only 9% of jobs in the U.S. economy

– The country’s ongoing spending binge–a national debt that has doubled over 8 years from around $10 trillion to almost $20 trillion by 2017 and interest payments about to take off with rising interest rates.

– Throw in a arms-race with China and Russia and the aging Baby Boomers setting up the economy for dramatic increases in Social Security and Medicare

And the “fun” NOT is only just beginning. 😉

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