Thijme Schriek @DrWily: "- 𝗬𝗲𝘀, 𝗬𝗼𝘂 𝗔𝗿𝗲 𝗘𝗮𝗿𝗻𝗶𝗻𝗴..."

Netherlands

- 𝗬𝗲𝘀, 𝗬𝗼𝘂 𝗔𝗿𝗲 𝗘𝗮𝗿𝗻𝗶𝗻𝗴 𝗟𝗘𝗦𝗦 𝗧𝗵𝗮𝗻 𝗕𝗲𝗳𝗼𝗿𝗲 - Wages are the primary source of income for many of us, so any increases in wages are always welcome, especially now with high inflation. However, over the last couple of years, consumers have felt like they were getting poorer, not richer, despite the economy's growth. So is this true at all? Well, let's look into it! - 𝗥𝗲𝗮𝗹 𝗪𝗮𝗴𝗲𝘀 𝗔𝗿𝗲 𝗗𝗼𝘄𝗻 - Now, if you look at data from the last couple of years in Europe and the US, you can see that consumers are worse off. Real wages declined around 2020 and began to recover two years later in 2023, but we still haven't fully recovered. In the US, real wages dropped 8.5% before rebounding, and currently, we are still 4.3% below all-time highs. It could take another 1 to 2 years before we see the highs of 2020, but if inflation picks up again, it could decline once more. However, at the moment, wages are growing at 4.1% per year, while inflation is growing at 2.9% per year. Nevertheless, with the weakening labor market and inflation picking up again, this could change. Now, if we look at Europe, we can see that the situation is a bit more complex but overall better than in the US. In many countries and industries, real wages have returned to or surpassed their highs; however, in others, this is not the case. It all depends on labor demand; for example, services did incredibly well during the post-COVID recovery. Meanwhile, some countries are also lagging; a good example is Italy, they are doing nowhere near as well as the euro area in general. Sources: tradingeconomics.com/united-states/inflation-cpi www.atlantafed.org/chcs/wage-growth-tracker www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/ fred.stlouisfed.org/series/LES1252881600Q www.ecb.europa.eu/press/economic-bulletin/focus/2025/html/ecb.ebbox202505_04~a71cdfe394.en.html - 𝗕𝘂𝘁 𝗪𝗵𝗮𝘁 𝗔𝗯𝗼𝘂𝘁 𝗧𝗵𝗲 𝗟𝗼𝗻𝗴-𝗧𝗲𝗿𝗺 𝗧𝗿𝗲𝗻𝗱? - Now i have to admit, looking at the last 5 years paints a very distorted picture, because the stimulus of the pandamic raised real wages a lot. According to the US data from the Federal Reserve, real wages increased by 8.6% from Q4 2019 to Q2 2020. This is a massive jump in real wages in a very short amount of time, which made everyone feel significantly richer than they were before. However, after that, real wages returned to normal levels, and ever since then, wages have continued to grow in line with the trends observed during the 2010s. So, really, not much has changed, but the rapid rise and decline we saw during the 2020s so far have affected consumers' perception of real wages. They feel poorer, and while this is true in some categories of consumer goods, overall, their purchasing power has been growing at a similar pace to what they are used to. While it is concerning to see real wages drop significantly, most people have to adjust to the wage growth they experienced during the 2010s. If you liked this short post, FOLLOW my profile for more; if you agree with my investing philosophy, COPY my portfolio to join the ride! My Performance speaks for itself! ✅ +40% in 2024! ✅ Well-diversified portfolio! ✅ Long-term mindset! ✅ Low-risk score of only 4! Be sure to copy my portfolio! $SPX500 $NSDQ100 $GOLD $BTC $ETH

5 Mentioned

SPX500

NSDQ100

GOLD

BTC

Bitcoin

ETH

Ethereum

Strictly Necessary Cookies

Performance Cookies

Functional Cookies

Targeting Cookies