On a number of occasions this month we’ve drawn attention to the divergent fates of the 80% of American workers whose wages are declining and whose general outlook is concomitantly deteriorating, and the other 20%, whose pay is increasing and who generally feel good about their economic future. We also pointed out that with the correlation between wages and consumer spending now nearly perfect at 0.93, depressed wage growth may indeed drag on US economic output going forward. Given this, we weren’t surprised to learn that the biggest threat to traditional American society is in fact class (i.e. income inequality). This is vividly illustrated in a new work by Robert Putnam (of “Bowling Alone” fame). One key observation: race matters far less than it did in decades past and class matters far more.
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