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A comment on Is the world economy entering a wage-price spiral?. Parent comment

Re:Is the world economy entering a wage-price spiral? by paulpauper on Tuesday October 19, 2021 @01:05PM (#28920513)
This is an argument of the 'wtf happend in 1971' thesis. I think however, there is another way of looking at it: by treating company profits and employee compensation as obeying a sort of conservation law. So if companies are hoarding profits that would go to workers, then this would be reflected in rising shareholder equity, so if employees invest their wages in stocks, the productivity-compensation gap is lessened. Indeed, the gap between productivity and wages began widening a lot in the early 80s, when the bull market began.
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Re:Is the world economy entering a wage-price spiral? by knappe on Tuesday October 19, 2021 @01:12PM (#28920599)
What a bad idea that would be though.

Talk about putting all of your eggs in one basket. I'd have a hard time believing anyone would suggest that you do this, as the risk for things going bad if the company fails is double. You lose income as the company stagnates (or worse get laid off) AND you lose money as the company's stock drops.

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Re:Is the world economy entering a wage-price spiral? by mullingitover on Tuesday October 19, 2021 @01:23PM (#28920751)
This all assumes that the working class can even afford to dabble in equity markets when it's being soaked by ever rising rent/healthcare/childcare costs.
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Re:Is the world economy entering a wage-price spiral? by piva00 on Tuesday October 19, 2021 @02:31PM (#28921645)
Given the latest news showing that 89% of stocks in the US are owned by the wealthiest 10% of Americans you aren't wrong, at all.
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Re:Is the world economy entering a wage-price spiral? by lotsofpulp on Tuesday October 19, 2021 @11:00PM (#28926273)
That report did not account for pension fund and other retirement account investments.
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Re:Is the world economy entering a wage-price spiral? by diordiderot on Wednesday October 20, 2021 @05:00AM (#28928411)
2/3 Americans have less that 100k in retirement or pension by age 50.
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Re:Is the world economy entering a wage-price spiral? by nostrademons on Tuesday October 19, 2021 @01:31PM (#28920894)
You don't have to invest it in your company. Invest it in whichever company is hoovering up all the profits.

To some extent people have been doing it, which is behind the massive stock price gains from FAANGs. Only benefits you if you did it before everybody else, though, otherwise prices get bid up so high that you don't get a decent number of shares.

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Re:Is the world economy entering a wage-price spiral? by cftm on Tuesday October 19, 2021 @02:07PM (#28921369)
Spent three years an eight months working in retail hell, and this was exactly what the company pushed employees to do - they were kind enough to sell shares to employees at a 10% discount but you had to be crazy, grossly miseducated or drank a bit too much of the kool-aid to believe that this organization was a good value store.
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Re:Is the world economy entering a wage-price spiral? by magicalist on Tuesday October 19, 2021 @02:47PM (#28921867)
> So if companies are hoarding profits that would go to workers, then this would be reflected in rising shareholder equity, so if employees invest their wages in stocks, the productivity-compensation gap is lessened

Unless the company is paying dividends (and the distribution is proportional to earnings), we can't assume that a company "hoarding profits" would have a correlated stock price.

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Re:Is the world economy entering a wage-price spiral? by diordiderot on Wednesday October 20, 2021 @05:03AM (#28928435)
Cash holdings and investment into physical capital are assets that should reflect in share price, no?
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Re:Is the world economy entering a wage-price spiral? by marginalia_nu on Tuesday October 19, 2021 @01:17PM (#28920673)
This is of course assuming the profits aren't siphoned off into some offshore tax haven.
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