Friday’s business news: The U.S. gross domestic product (GDP) topped 4% in the second quarter of 2018. Together with stout investment markets, robust consumer spending and low unemployment, most of the economy is humming along. After eighteen months of the Trump administration, the future ex-president has proclaimed our economy to be “the envy of the entire world.”

Indeed, there is a segment of the economy, the property class, that is doing well. It is euphoric over the quarterly report. CEO pay has skyrocketed. The sun may be shining on the hill but the valley is still under cloud cover. Wages rose 2.6% last year, a major gain. Real wages only grew .2% for a comparable period. Even gross wages have been stagnant this year, and unemployment ticked up in June. The numbers get worse when broken down demographically; no surprises there.Another story explained that in France and Germany, the land of our future ex-allies, finally wages have begun to rise. They’ve risen slowly, considering that those countries have been at full employment for a while. Full employment usually results in higher wages, but that’s not how it’s been working out in Western Europe, at least not as rapidly as it has done historically.

European economists ask why wages have not moved up along with growth and employment, a question we Yanks need to think about, too. The European Union dispatched a team of prominent economists to tackle the question. The European economists didn’t agree because first, they’re European and second, they’re economists.

In Europe and America, collective bargaining has lost much of its starch. Unionism is out of political favor, due only in part to corrupt union leadership. Employees without organization cannot match their boss’ negotiating power. Last month, the U.S. Supreme Court ruled that a non-union public employee can’t be required to pay union dues. The upshot is that public employment unions will have less money to work with on business matters. As a result, public employment unions will become a lot quieter and not just on political issues. The ruling affects the union’s bargaining power.
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The European economists also considered freelancers who’ve gone off to work for the,m (Uber and AirBnB). In the US, freelancers have become a distinct segment of the economy and should create upward pressure on pay. Freelancing has grown rapidly in Europe. Still, wage hikes remain slack.

Another theory is that increasing inequality between management and labor suppresses wage hikes. If workers are needed, that demand should push wages up. However, the concentration of wealth continues to increase at Mr. Moneybags’ end of the pond, while real wages are stuck in shallower water. Yes, we have a record flood-tide but only particular boats are rising with it. Inequality may not be the cause; clearly it is an effect. It may be both.

The story is the same all over the developed world. Ownership is not multinational; it’s global: hoarders without borders. At some point workers will stop spending money they don’t have and will run out of plastic power. They will buy fewer homes, see doctors and dentists less often, eat at home more, and hold off buying the new car. The consumer economy will contract, kickstarting a new cycle of boom and bust. It doesn’t have to be that way. As long as the workers are fat and happy, the boss will continue to be fat and happy, but slightly less so.