Business Report: Unemployment and inflation are down, so why are wages?
HONOLULU (HawaiiNewsNow) - Unemployment is low, yet inflation is low. And wages are low. That's unprecedented says the Oracle of Omaha. Warren Buffett says textbooks never mention even this possibility. So what happened? Some of it can be explained. Buying power has eroded, so we spend less, so inflation is low. Manufacturing moved away, to where labor is cheap, so prices are low. Companies learned how to deliver dividends even in slack times. So Wall Street is up but Main Street lags.
Is this a new normal, or is it unsustainable? 70% of economic activity is consumer spending. But to spend more, you need more money. So everything boils down to this: is income keeping up with inflation? It is not. Bad for the little guy, but in the long run, bad for everyone.
And that’s Crisis at a Glance.
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