We have discussed this repeatedly since the post-financial crisis recovery began in 2009. That recovery was very lumpy and unevenly distributed. The key wage drivers were determined by the industry you worked in, your geographic location and your level of education. If you were in the right sector near a successful city with a college or graduate degree, you did quite well. The rest of the labor force mostly struggled.
And that was before the pandemic. If you disliked how the last economic expansion unfolded, you are going to really hate the next one, as the economic divide has become even steeper. All of the factors impacting wages and employment are now more pronounced. Economically, there has never been a worse time to be high school dropout in America. Workers with more education simply have lower unemployment rates, according to the Bureau of Labor Statistics. They also earn more money. This gulf is likely to widen even further in the future.
I am forced to admit that the letter “K" captures the coming recovery in its simplest form.
Barry Ritholtz is a Bloomberg Opinion columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He is the author of “Bailout Nation.”