In this recent post ‘ America is getting a raise and Goldman Sachs is freaking out about it ‘ Nick Casella cites an extract from investment bank Goldman Sachs’ daily newsletter ‘ Global Markets Daily’ which indicates that they think rising wages in America will be bad for corporate profits.
“Wages are rising. The ‘wage tracker’ maintained by our US economics team — a composite measure of wage growth based on the four main wage indicators — hit 3.0% year-on-year in the first quarter for the first time in this expansion…. And as our colleagues in equity strategy have recently pointed out, rising wages are a threat to corporate profit margins” (1)
This news letter is an example of a private document as it is only sent to high net wealth investors, who invest in Goldman Sachs’ financial services, and was never meant for public eyes, not being available in the public domain of their web-site.
It’s a nice example of how private (ish) documents can give you an insight into the simple logic of these companies – and this insight seems to suggest that Marxism is still relevant today… this really does seem to be a simple case of the Capitalist class panicking about the working classes (those who receive wages) earning more and thus taking a greater share of wealth they generate.
(1) “Labor Costs and US Equities: Stocks Confront Rising Wages with Economy at Full Employment”, Portfolio Strategy Research, May 9, 2017).