it is astonishing and absurd that since Ted Kennedy died there have been few lawmakers campaigning to restore the minimum wage. a long overdue minimum wage hike would pour tens of billions of dollars into job-producing consumer demand, especially during a recession, which we're about to have.
Wages should be set by the market, nothing else. Keep the Govt out of it.
Something does seem to be messing up the market. Low unemployment and stagnant wages is strange.
IMO, the primary reason is below:
Velocity of M2 Money Stock
Because of the MASSIVE and unprecedented economic intervention by the Fed (and major, world central banks) since at least 2009, this has caused money to stop 'moving'.
Instead of money changing hands - like in normal, healthy economies - existing money stays put while new, cheap debt is created and that is used. And so on. With QE and ZIRP, people don't need to make money, just take out more incredibly cheap credit. Corporations don't innovate - they just take out cheap loans, buyback their stock and sent their bottom lines skywards. Which is largely why most new jobs created are crappy.
The added problem is, only the wealthy/corporations have easy access to this money. So they are the ones who get richer. And the rest get left behind.
Finally, if you look at the chart above, two things stand out. 1) when money velocity is down, economies almost always suck (The gray areas represent recessions); and 2) the Velocity over the last few years is FAR lower than it EVER has been.
The reason the chart is finally, slowly turning around is QE is almost over and interest rates are slowly rising. But, as you can see...it is still mired WAY down.
