Thursday, June 21, 2018
Business

As Dow approaches 17,000, wages remain stagnant in lopsided recovery

The Dow could hit 17,000, yet another record, as early as this week. If not then, it will likely happen soon. Not a bad ride since the Dow tanked to 6,547 little more than five years ago.

That's remarkable news for folks rich enough to have substantial stock market investments. To most people in this country with little or no assets in stocks, a new Dow high is irrelevant and a nagging reminder how a wealthier slice of America prospers while others do not.

More tales of inequality? This one's driven by the buzz from a Wall Street Journal opinion piece that tells us the aggregate wealth of U.S. households, including stocks and real-estate holdings, just hit a new high of $81.8 trillion.

That's more than $26 trillion in wealth, or nearly a third of the total, added since only 2009. Last week's WSJ piece was written by former Federal Reserve Gov. Kevin Warsh and Stanley Druckenmiller, the founder of Duquesne Capital. Their take on the new wealth high: No wonder Wall Street — but so few others — is celebrating a recovery built on a soaring stock market.

"It provides little solace for families and small businesses that must rely on their income statements to pay the bills," the authors wrote. "About half of American households do not own any stocks and more than one-third don't own a residence. Never mind the retirees who are straining to make the most of their golden years on bond returns."

Keep this lopsided recovery in mind and look at the latest wage figures from the U.S. Bureau of Labor Statistics.

Nationally, the average weekly wage of $1,000 has not budged in the past year. Throw in an inflation rate of 1.5 percent in 2013 and wage earners lost financial ground.

The Tampa Bay market is hardly better. Hillsborough County's average weekly wage in the fourth quarter of 2013 hit $960. That's a paltry gain of only 0.4 percent from a year earlier, and less than an inflation rate that wasn't all that high in the first place.

People employed in Pinellas also had little to crow about. Their average $900 weekly wage rose just 1 percent in the same period. In Pasco County, the good news is the 1.6 percent wage gain slightly outpaced inflation. The bad news is the average weekly wage in the county was an anemic $695.

Back in 2004, Pinellas workers averaged just $720 in weekly wages. But wages were growing at 4.2 percent back then. Hillsborough's average wage then of $776 was rising at a brisk 5.4 percent clip.

That was then. Now it's tough to tout a genuine recovery with rising costs and flattened paychecks.

Small wonder Florida is starting to hear renewed calls for a higher minimum wage.

And small wonder last week's piece in the Wall Street Journal was headlined: "The Asset-Rich, Income-Poor Economy."

It's a bad recipe.

Contact Robert Trigaux at [email protected]

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