We asked yesterday, albeit somewhat jokingly, what market needed to “see the money” the most. Stocks, bonds, or gold?
Markets are certainly setting up for an interesting September.
Have a great Labor Day weekend!
We leave you with a little history of the origins of Labor Day from our good friend and one of the smartest guys we know, Pat Alwell of Strategas Research. This is from his must read daily missive. If you’re not on his list, get on it!
Labor Day in the US was established in 1894 after decades of conflict between capital and labor, and about 40 years after the publication of Das Kapital. The holiday was championed by, among others, Eugene Debs, who ran for President as a Socialist not less than 5 times. It was pro-Labor President Grover Cleveland, the first Democrat to break the Republican hold on the White House since Lincoln, who created the holiday after using Federal troops to quash a strike at the Pullman car Company. Though Labor got a holiday, Cleveland removed it from the International Workers Day of May 1 which many American capitalists associated with red berets, strong coffee, and matching 401Ks. So here we are 118 years after Labor Day became a national holiday contemplating the battles between labor and capital, the rich and the poor, individual rights over the collective.
Organized labor peaked decades ago and now union membership accounts for less than 12% of the US labor force. The strongest representation for organized labor is within government with a unionized rate 5 times that of the private sector. Education workers enjoyed the highest unionization rate of 37% while sales people enjoy (or suffer) the lowest at 3%. Money capital, eager to flow where it is treated the kindest, dominates labor both in the US and abroad. This is best reflected in the meager wage increases accruing to labor despite years of outstanding productivity increases. At one point in 1997, Morgan Stanley Economist, Steve Roach, claimed that money capital would suffer a “worker backlash” as wages grew slower than productivity. It never happened.
(click here if chart is not observable)