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I encourage everyone to do the following simple exercise: look at the main stock market in your country, and see how far back you must go for the main index to

• Herring 1y ago
  Agreed, but I suggest that's only part of the story. For some reason, workers in the west don't organize/vote by class any more. https://nymag.com/intelligencer/2020/04/why-americans-dont-vote-their-class-bernie-sanders-marxist-electoral-theory.html https://nymag.com/intelligencer/2020/04/why-americans-dont-v... In the US, the last time democrats tried to tackle healthcare, they lost scores of seats all down the ballot. https://www.quorum.us/data-driven-insights/under-obama-democrats-suffer-largest-loss-in-power-since-eisenhower/ https://www.quorum.us/data-driven-insights/under-obama-democ... I remember tracking Trump's poll numbers on 538 (before it got taken down) during the pandemic. They barely budged, despite not having universal healthcare. He then proceeded to get the most votes of any sitting president.
  • basilgohar 1y ago
    Now more and more people in red states are asking about healthcare. Seems like they could or should be capitalizing on this, unless the parties are going to flip on this issue to keep their power balance.
  • smt88 1y ago
    The US is starting to reorganize by class, the union laborers are voting for anti-union candidates.
  • techdmn 1y ago
    Can't speak for anyone but myself of course, but I was pretty disappointed with the way Democrats under Obama tackled healthcare. One of the big differences between Obama and Clinton in the primaries was that Clinton was in favor of an individual mandate, and Obama was not. We still ended up with an individual mandate, which is both offensive on grounds that the government is forcing you to find and pay for insurance (not always easy on the exchange), and on the grounds that the primary purpose of the mandate is to ensure that insurance companies stay profitable. Former Al Gore running mate and future republican Joe Lieberman is often given credit for stopping the nationwide insurance exchange in favor of state-level exchanges, again tipping the market in favor of insurers. Ending denials for pre-existing conditions was nice, as were a few of the other details, but it felt like a far cry from the hope and change voters were promised. Mostly it exposed more-of-the-same pandering to the rich and powerful. Last I checked Medicare For All polls quite favorably.
    • Herring 1y ago
      Whatever is worth doing is worth doing badly. Obamacare wasn't perfect, but it had tons of positive effects and could later be improved. Republicans seem to be the only ones with a 50-year plan and the discipline to see it through. https://www.pewresearch.org/politics/2024/06/24/americans-views-of-government-aid-to-poor-role-in-health-care-and-social-security/ https://www.pewresearch.org/politics/2024/06/24/americans-vi... > 41% of Americans say the government should provide more assistance to people in need > 30% say it's providing about the right amount > 27% say it should provide *less* 41-57? If there are issues in America, it's because Americans want it that way.
      • potato3732842 1y ago
        >Whatever is worth doing is worth doing badly. Obamacare wasn't perfect, No, that's BS. It was worse than nothing and probably set us back years. We'd probably have a more workable alternative at this point if not for the detour.
    • FabHK 1y ago
      > with an individual mandate, which is both offensive I find the mandate entirely inoffensive. Its purpose is not to ensure that insurance companies stay profitable. Its purpose is to avoid adverse selection, and to ensure that everyone adequately ensures against health risks, to avoid forcing others to either pick up the tab or watch people being kicked out of hospitals and die miserably.
• delichon 1y ago
  ... and most of it is taken/given to the owner of the capital, not the provider of labour. I predict that AI will amplify this trend, because it lowers the demand for routine human labor and raises the return on the agentic (e.g. founder) labor that leverages routine labor.
  • jrs235 1y ago
    It's going to get dicey when millions are no longer needed for labor or to consume goods (keep the economic engine going). Oh and amoral robots can do the dirty work ...
    • deleted 1y ago
      [deleted]
• ambicapter 1y ago
  What is sickeningly upsetting is how difficult it seems to be for our news organizations and talking heads to talk openly about this fact.
  • 93po 1y ago
    its not difficult - it's that they very clearly HATE class consciousness. just look back at occupy wallstreet. it got coverage that was nearly universally mocking it and sneering at it, and the second they were able to ignore it and pretend it didnt exist anymore, corporate news moved on. everything is framed as us-vs-them in corporate news, and its usually one political party against another, and it's usually for stuff that doesn't impact us nearly as much as wealth and income inequality, campaign finance reform, or general election methodology reform. this is why establishment hated bernie, it's one of his biggest talking points. corporate news is garbage, its owned by billionaires literally to control the narrative. you think bezos bought WaPo to make money? of course not, it's a money pit.
    • lurk2 1y ago
      > it got coverage that was nearly universally mocking it and sneering at it, and the second they were able to ignore it and pretend it didnt exist anymore, corporate news moved on. This is exactly how I remember the coverage, but it’s notable that these people tied their own noose: Occupy Richmond 10/6/11 Intro to "Progressive Stack" https://www.youtube.com/watch?v=SCwhlZtHhWs https://www.youtube.com/watch?v=SCwhlZtHhWs The leadership then largely went along for the ride in the technology and corporate finance sectors by electing to become a pseudo-priesthood under the banner of DEI. A lot of money got siphoned off by these people during the boom in exchange for countersignalling the anti-corporate sentiment prevalent among progressive coalitions at the time. This declined somewhat during the latter half of the 2010s after the tech companies started censoring conservatives (“They’re a private company, they can do whatever they want.”), and then the trend reversed when Biden’s senility became obvious, and the tech companies pivoted to Trump and started (disingenuously) signalling that they were anti-woke. In a lot of ways, Peter Thiel’s entire model of hiring ostensibly right-wing influencers (while himself being a homosexual immigrant) mirrors that of woke capital 10 years prior.
• rtp4me 1y ago
  Speaking as someone from the US, how is this a meaningful comparison in anyway? Honest question. Sure, wage growth sounds good in an upward trending market, but let's say the market has gone down 30% over the past five years. Would you expect everybody to take a 30% pay cut? If Walmart had a blockbuster year because their suppliers charged less (more efficient means of production), how are Walmart employee wages interconnected to the supplier charges? I suppose what you are saying is the profits of the company should be poured back into worker salaries. I agree to an extent. But, what if the company undergoes very hard times (3-5 years of negative growth)? Should the company take back wages? I think this is a double-edge sword.
  • spot5010 1y ago
    Layoffs contribute to the average worker taking a paycut. And we are seeing layoffs even in a market that is soaring. Why do you think that workers wouldn't be affected during a downturn?
  • assword 1y ago
    [dead]
  • _DeadFred_ 1y ago
    Every company that goes down 30% cuts a ton of workers, that's way worse than just a pay cut.
  • the_real_cher 1y ago
    they lay people off they don't give pay cuts
• gruez 1y ago
  >And it really is as simple as that. It really isn't, because your "simple" comparison is bunk. For one, it's measuring stock vs flow. Stock prices measure stock, eg. the size of a piggy bank. Salaries measure flow, eg. your annual salary. Directly comparing the two results is meaningless. It's easy to demonstrate this with the piggy bank example. If your salary was 50k/year, you saved 5k/year, then your piggy bank would be growing much faster than your salary growth, but it doesn't say much about the economy, or whether you could quit your job or not. In fact, if you started with $0 in savings, your piggy bank growth would be infinite, which really shows how absurd stock vs flow comparisons can be. Moreover stock prices incorporate a variety of factors that are irrelevant to wealth distribution. Low interest rates makes stocks more valuable by reducing the future discount rate, and corporate consolidation makes stock indices go up, but neither of those factors directly affect inequality. For instance, a simple DCF model would value a company with earnings of of $1/share/year at $16.67/share if the risk free rate was 6%, but $33.33/share if interest rates were at 3%. However it's unclear whether such drop in interest rates would double inequality, as a direct comparison would imply. After all, most people hold on to debt (eg. mortgages) as well savings.
  • cameldrv 1y ago
    If you want a flow, here you go: https://fred.stlouisfed.org/series/A053RC1Q027SBEA https://fred.stlouisfed.org/series/A053RC1Q027SBEA Corporate profits in the U.S. have almost doubled since 2019.
    • gruez 1y ago
      That has other issues. For instance change in ownership structures (eg. mom & pop shops selling up to private inequality) would change this figure without anything else changing. The statistic for "Share of Labour Compensation in GDP", which avoids such issues shows that while it has dropped (ie. more money going to capital), the scale is grossly exaggerated. https://fred.stlouisfed.org/series/LABSHPUSA156NRUG https://fred.stlouisfed.org/series/LABSHPUSA156NRUG
    • potato3732842 1y ago
      All these "doubled since 2015/2019/20whatever" stats tie back to a dirty word that starts win In and ends with "flation" And, as everyone who wasn't lying for various reasons predicted and anyone can see by looking at prior comparable events in history can tell you, wages are one of the last things to go up.
• donatj 1y ago
  It’s really not that simple. - Populations have grown in the last 7 years. Workforces have changed. - Stocks rise on hype, debt, and low interest rates — not from actual value or work done. - Borders are porous. Cheap labor moves. - Companies come and go. And there's far more to it than that. Saying it is "really that simple" is nothing but call to outrage.
  • 93po 1y ago
    it doesnt really matter if there are bars of gold to backup the value of a company's market cap. the point is that you can sell the shares for money, and to further emphasize this, you're literally taxed on that gain just like income tax (though annoyingly much lower, which further reinforces mistreatment of working class).
  • aredox 1y ago
    This doesn't contadict that rich renters have it better than actual workers - sucking the riches they produce. You are just pointing out some of the reasons why.
• username332211 1y ago
  On the 8th of August 2018, the FTSE 350 closed at 4320. The current level is 4980 giving us a 7-year rate of return of around 15%. I assume the United Kingdom of Great Britain must be a paradise for the workers, right?
  • Ntrails 1y ago
    > I assume the United Kingdom of Great Britain must be a paradise for the workers, right? As a proud citizen and indeed worker of ol' Blighty I assure you it's a paradise of unequalled benevolence. Every worker a member of the board.
    • deleted 1y ago
      [deleted]
  • lesuorac 1y ago
    China is flat compared to 10 years ago so yeah I think this argument checks out? The whole stock market on fire is really a US-specific phenomenon. https://tradingeconomics.com/china/stock-market https://tradingeconomics.com/china/stock-market
• csomar 1y ago
  > And it really is as simple as that. As society we have tremendously increased productivity, and most of it is taken/given to the owner of the capital, not the provider of labour. You know that the increase in price could be simply... ehm.. inflation. So no productivity increase out there.
  • Epa095 1y ago
    Inflation is important yes, but it hits the stocks and salaries the same. So the ratio between them are the same, and the moral of the story, that most of the wealth goes to the owners, remains. But yeah, how amazing the productivity increase actually is is a bit more complicated.
• NoMoreNicksLeft 1y ago
  Why would stock market valuation be a good metric? If Walmart's valuation doubled in that period, does it mean they sold twice as many goods? How could salaries hope to double, if the things people buy with salaries didn't also double? Did Ford's vehicle sales double in that period? If these things aren't happening, then what would be the point of salaries doubling? If they gave me a raise tomorrow of $150k, that'd be great. I'd be sitting pretty. But if they gave all of us an extra $150k starting tomorrow, none of us would be better off materially... the inflation would eat up any gain whatsoever. The only reason the stock market valuations don't do this is because the vast majority of us aren't buying stocks. That money's illusory. So no, it's not "really as simple as that". For all this supposed productivity that you claim, there's not been any significant increase in product.
• an0malous 1y ago
  This is an oversimplification but directionally correct, if you want the academically rigorous proof just go read Piketty’s papers
• verdverm 1y ago
  Also look at the wealth inequality graphs The oligarchs want a new gilded age
• burnt-resistor 1y ago
  Go back 50 years, and 95% of Americans should be raising Cain. Of OECD countries, the US has ridiculous income inequality distribution and effective reductions in purchasing power over time. https://youtu.be/QPKKQnijnsM https://youtu.be/QPKKQnijnsM Anecdotally: Someone would need to make $350k/yr to live where I grew up in a not great area where there were robberies, shootings, and thumping radios all the time. Also, where my blue-collar grandparents lived requires an income of around $475k/yr to afford a 30 yr mortgage. The latter is equivalent to a salary of buying 2 houses/yr where I live now.
  • WalterBright 1y ago
    > income inequality distribution Money in a capitalist society is not distributed, it is created. The elephant in the room is the amount of money vacuumed up by the government which then disappears. Remember the Fire Aid for the LA fires victims? They raised $100m which disappeared without a trace. Then there's all that money for the California bullet train. Still no track laid.
  • ThrowawayR2 1y ago
    Going back 50 years is the mid-late part of the post-WW2 economic boom. Sure, you can have that kind of growth back but only if you're willing to go through World War 3 to get to it.
  • Projectiboga 1y ago
    The tax cuts and other regulatory shifts allowing things like share buyback and the carried interest loophole (might be closed now) have shifted up the share of the GDP held by the top 10%. This has slowed the velocity of income, as a wealthy person doesn't spend their income the same month the way a person in lower quin-tiles does. This has caused a stagnation in middle class standards of living. This is a headwind that didn't exist 60 or 70 years ago. There was also a demographic advantage as WW2 had thinned the heard and there was a once ever level of economic prosperity. The tax code encouraged big business to invest in labor, which isn't happening now.
• exasperaited 1y ago
  Right now if indexes show massive gains it's based in large part on developments in AI, which is a corporate-friendly development predicated on destroying jobs by replacing people with AI tools and human effort with AI effort. The markets stopped correlating well with consumer sentiment a long time ago but since ChatGPT launched it is easier to assume that if the market is doing well, ordinary people are worse off. This gulf only gets more obvious over time, and it is one of the key differences between this bubble and the dotcom bubble (the latter revitalised many niche businesses by finding them global markets or a viable business model).
• GoatInGrey 1y ago
  Once you factor in P/E ratio inflation on those higher equity prices and replace salary with total benefits (i.e. including healthcare benefits), the scenario is revealed to be decidedly NOT simple. It would be nice if solving a web of problems affecting multiple billions of people was as simple as thinking "The rich are fucking us".
• pfannkuchen 1y ago
  If the stock price is primarily reflective of real productivity, then stock market crashes would have to be caused by sudden drops in productivity. Are they?
  • WalterBright 1y ago
    There are waves and eddies in a river, but overall the water still flows downhill.
• darth_avocado 1y ago
  > look at the main stock market in your country, and see how far back you must go for the main index to be half of what it is today Instead of the stock market, just do housing costs. People say they are stressed about groceries. But what they are really stressed about are grocery prices AFTER they paid rent/mortgage/property taxes etc.
• lanfeust6 1y ago
  > we have tremendously increased productivity Productivity has not increased tremendously. See e.g. https://www.seeitmarket.com/u-s-productivity-why-key-understanding-todays-economy-18863/ https://www.seeitmarket.com/u-s-productivity-why-key-underst... https://www.bls.gov/charts/productivity-and-costs/labor-productivity-by-sector-most-recent-quarter.htm# https://www.bls.gov/charts/productivity-and-costs/labor-prod... . Inflation is not that.
• bluecalm 1y ago
  [flagged]
  • the_real_cher 1y ago
    The math in the statement is correct in the short term. If the risk-free rate is around 3% and the equity risk premium is about 4%, the expected return on stocks would be roughly 7% a year, which would double values in about 10–11 years using the Rule of 72. That doubling could occur for a time even without productivity growth, as companies can boost earnings through pricing power, cost-cutting, or financial engineering. Over the long run, though, sustained returns depend on fundamentals like productivity growth, population growth, and inflation. Without productivity gains, corporate profits would eventually stagnate, making it difficult to maintain a 7% annual return. Risk premiums, interest rates, and valuations also change over time, so fixed assumptions rarely hold for decades. In short, the doubling math works, but it oversimplifies the economic reality that long-term stock growth ultimately relies on productivity.
    • bluecalm 1y ago
      My point was that is that even without any economic growth stock indexes grow quickly because they are cumulative (that is include profits of companies by either dividend paid or stock buybacks). Some indexes are not fully cumulative but they are still close enough because companies often prefer buybacks to dividends these days (for good reasons).
      • the_real_cher 1y ago
        Stonks always go up.
        • bluecalm 1y ago
          They do in expectations of course. It's like saying "overall businesses make money and money accumulates over the years". You are rewarded for not spending your money right now. Taking some risks (risk premium over risk free rate) and not being an idiot (keeping your money in a bank or mattress or whatever). Market puts price on that reward. Unless you believe market is completely wrong about everything then yes - stonks will go up. Sometimes I feel the reason for many political views presented on HN is misunderstanding of very basic of finance and economy. The whole discussion here that started with absolutely nonsense comparison (stonks go up faster than wages) is one example of that.
• Huppie 1y ago
  It's probably not that simple because at a cursory glance I see quite a few points in history where my country's main stock index was about 50% of its current valuation: January 1998, February 2006, January 2015, July 2016, April 2020. Sure compared to the last time (2020) or before that (2016) it's a big difference, but compared to the first time we're pretty close to a 100% increase in median salary. Compared to the second time it's still close it 60%.
• osigurdson 1y ago
  Oh, I know what to do: give the means of production to the workers. I'll selflessly volunteer to lead the movement (and eventually be crowned king).