Haves and Have Nots has been the backdrop of this recovery. The Bifurcated Economy is how many phrase it. We also hear that “companies are doing more with less people” to explain how corporate profits are breaking records and luxury goods makers like Coach and Tiffany see unabated demand while the unemployment rate above 9% simply does not budge. What if I told you I could explain this phenomenon with a single graph?
The below chart (average hourly earnings) released this morning from the St. Louis Fed comes pretty damn close. Those who have jobs are making more, partially as a result of high profits from the lower, more productive headcounts at companies large and small: