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I’d like to earn more, but I also want the market to keep on going up for my retirement investments. At mid career, my 401k performance over the next 20 years

I’d like to earn more, but I also want the market to keep on going up for my retirement investments. At mid career, my 401k performance over the next 20 years is now market driven, rather than by contributions over the next 20. So at this point, I’d rather have better investment returns than a higher salary.

bmcusick 8y ago
Everyone does. Hell, I do too. But it's not realistic to expect this music to keep playing. The ratio of workers to retirees keeps getting worse, from 10:1 in the 1950s to 3:1 today, and falling. The economy can grow over time, but on any given day it's a fixed pie, and it has to be divided among workers (who are doing the labor now) and retirees (who accumulated the capital in previous decades that today's labor uses to magnify their productivity). Everyone is feeling squeezed as individuals because of falling incomes, but the real culprit is a falling ratio of income-makers (labor) to income-takers (capital, whether retired individuals or just wealthy). This cannot last. The ratio of labor income to capital income will eventually be restored (hopefully in a peaceful manner, but we can't rule out alternatives). The reasonable fix will be raising retirement ages, but good luck getting a sufficient raise there to restore a 10:1 ratio.
nimish 8y ago
If you read the article you would know that labor wage increases are laughably low compared to share buybacks. Raising salaries 10% would barely even touch cash returns to shareholders
- madengr 8y ago
  You conveniently ignored the 8% drop in AA stock. Doesn’t matter if that was due to dividend reduction or spooking investors, it’s still a big drop.
  - nimish 8y ago
    And Wal-mart shares rose by 8% in the year after they announced wage increases. The broader issue is that shareholders have deluded themselves into thinking that they are the end-all-be-all of a company when in fact their contribution is limited.

bmcusick 8y ago

Everyone does. Hell, I do too. But it's not realistic to expect this music to keep playing. The ratio of workers to retirees keeps getting worse, from 10:1 in the 1950s to 3:1 today, and falling. The economy can grow over time, but on any given day it's a fixed pie, and it has to be divided among workers (who are doing the labor now) and retirees (who accumulated the capital in previous decades that today's labor uses to magnify their productivity). Everyone is feeling squeezed as individuals because of falling incomes, but the real culprit is a falling ratio of income-makers (labor) to income-takers (capital, whether retired individuals or just wealthy). This cannot last. The ratio of labor income to capital income will eventually be restored (hopefully in a peaceful manner, but we can't rule out alternatives). The reasonable fix will be raising retirement ages, but good luck getting a sufficient raise there to restore a 10:1 ratio.

nimish 8y ago

If you read the article you would know that labor wage increases are laughably low compared to share buybacks. Raising salaries 10% would barely even touch cash returns to shareholders

madengr 8y ago
You conveniently ignored the 8% drop in AA stock. Doesn’t matter if that was due to dividend reduction or spooking investors, it’s still a big drop.
- nimish 8y ago
  And Wal-mart shares rose by 8% in the year after they announced wage increases. The broader issue is that shareholders have deluded themselves into thinking that they are the end-all-be-all of a company when in fact their contribution is limited.