The Economy's Persistent Impasse
As many readers know, I have been concerned that workers' wages have not been growing. Real weekly wages have fallen by 0.9% since their nearby peak in October 2010. Consumer spending is important; it accounts about two-thirds of our economy. But the only way consumer spending can grow is if workers see bigger paychecks.
While consumers can, of course, take on more debt or save less, the savings rate is a low 4%, and increasing credit-fueled consumption would only lower the savings rate further. By comparison, for many decades the savings rate had been in the 8% to 10% range, up until about the early 1990s, and workers need to replenish retirement accounts....751 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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