U.S. employers’ labor cost sustained its five year high into the third quarter of 2014. Economist believe this is being driven by a tightening labor market, which often results in company pressure to raise wages and salaries. According to the Bureau of Labor Statistics, wage and salaries, which make up about 70% of compensation costs, rose 0.7% over the last two quarters.
In the original “U.S. On The Brink: Near-Depression Levels Losses In Wealth Expected” article, the expected median wealth loss was projected to be 18% to 27% over the next 2 to 5 years, respectively. This was driven by a decline in the Wealth to Income index and lower than expected rise in Median Income. Give this sustained change in wages and salaries, the following revised losses in Wealth are based on projected mean Median US Incomes (upward revision):
The revised analysis now shows a median wealth loss of 15% to 23% over the next 2 to 5 years, respectively. This means that for a family who has a median net wealth of $182K (Federal Reserve, 2013), they are likely to see it fall to $154K by 2016 and $140K by 2019.
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