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Feel free to look at dividend yields, but I can pretty much guarantee that it has not halfed in the period the stock market doubled. Most likely it stayed relatively flat, somewhere between 1.5% and 2%.

So if you had 100 million you would get 1.7 million as dividend 5-7 years ago, now it's roughly doubled, without selling any of your stocks.

Not that it really matters. Given how much faster the stock market grows compared to salaries you can sell a few percentages of your wealth every year, and still get richerer by doing nothing besides owning.

>Feel free to look at dividend yields, but I can pretty much guarantee that it has not halfed in the period the stock market doubled. Most likely it stayed relatively flat, somewhere between 1.5% and 2%.

Eyeballing this chart it looks like it dropped around a third since the pandemic.

https://ritholtz.com/wp-content/uploads/2021/09/spx-div-yld....

https://ycharts.com/indicators/sp_500_dividend_yield

If yields stay the same actual dividends still grow in a rising market. Of course dividends aren’t a good representation of increased wealth. Stock price + dividends is. Companies generate profit which gets added to the balance sheet or paid out as dividends. It’s basically two ways of accounting for the same income (with some minor differences like tax implications).

(First, I apologise that this message must be hasty, I must do life stuff).

I really feel like your first graph proves my point? OK, at times it goes up, at times it goes down. But since 2002 the dividend is the same, but the S&P 500 is 7x. So the lazy capitalist puting in 10 million there in 2002 got 132k in yearly 'income' then, now he gets 925k yearly.

You wanna figure out how much average salary increased the same period? I am willing to bet it's closer to 2 than 7.

And that shows who gets the fruit of our increased productivity. Owners.

I fully agree. Additionally, stock price is driven also by expectations of further growth, which in order to keep happening, something's gotta give so it must chip away at quality of the final product too (cheaper materials, cheaper manufacturing, etc) with a consequent enshittification. My parents, who live in Italy, could afford a stone house from the 1800s in their thirties. I live in Canada and everything's made of wood and snot and and costs a fortune.

Just for fun, watch a movie from the 30s, 40s, 50s, etc., and take a look at the interiors of houses.

We've got a lot better today, and a lot more of it.

Even watch an episode of Dynasty (about rich people). Look at the crappy TV in the corner. I remember taking my last CRT TV to the recycler. I was sure glad to be rid of it.

You realize you're an enormously privileged, wealthy individual telling other people that don't have your wealth and privilege how they should feel the same as you? You don't even say "in my experience" you just condescend to others that they should recognize how great the world is for the 0.1%, completely unaware that it isn't great for people that can't afford food and housing. Nobody gives a shit about their TV when they're hungry on the street.

I was born into a lower middle class family with several siblings. My dad skirted bankruptcy. My first car literally came from a junkyard in pieces, bought with money I earned from my paper route. Hardly 0.1%.

(I didn't know how bad things were for him until I went through his papers after he died.)

I began investing with my first real job, with another crappy car I repaired with junkyard parts.

A good friend of mine grew up in a family that qualified for welfare but wouldn't accept it. He didn't get past high school. He managed to make himself $10m before his tragic death. Yes, the US is the land of opportunity. Other countries can emulate it if they want to.

A couple years ago, I booked an Uber ride. The driver was a refugee from Afghanistan. He arrived in the US with nothing but his skin. Within a few months he had a thriving business, driving the Uber in whatever extra time he had left. It was fun talking to him - he was hella ambitious!

Setting aside everything else I'd normally say, I do respect that you make an earnest attempt to engage with almost anyone.

Thank you for the kinds words, I appreciate them.

Notice that I am not saying that labour is not getting more purchasing power, just that owners is getting more quicker. Luckily our increase in productivity is high enough that both can get more in absolute terms, although owners gets a larger part of the growing cake.

>I fully agree. Additionally, stock price is driven also by expectations of further growth, which in order to keep happening, something's gotta give so it must chip away at quality of the final product too (cheaper materials, cheaper manufacturing, etc) with a consequent enshittification.

???

You're omitting some steps here. While "enshittification" probably happens to some extent, it's unhinged to suggest that's the only explanation for growth, as opposed to more mundane explanations like "better technology".

>My parents, who live in Italy, could afford a stone house from the 1800s in their thirties. I live in Canada and everything's made of wood and snot and and costs a fortune.

Seems like a stretch to blame this on "enshittification" when North American houses have been made of wood for centuries.

I didn’t mean it’s the only explanation, but it sure is a knob that companies use to tune “growth” (or fake growth, for that matter), among other things like better technology.

In most places, residential real estate prices are driven mainly by land values rather than construction quality. But if you want to live in Italy they're literally giving away free houses.

https://www.cnn.com/2024/11/19/travel/italian-village-ollola...

Most companies moved to stock buybacks instead of dividends for tax reasons.

Keep in mind that anyone can buy stock. And stocks in the US historically outperform passive real estate investing.

Careful with "can". It is possible for the homeless guy on the corner to buy stock in the sense that he is not prohibited from doing so. But on the other hand, the actual fact is that he can not purchase stock.

Right, ability to buy stock is predicated on having the money to do it, after paying for basic necessities. People who work for a living have less money than those who don’t. So when stock prices rise, even workers who can save see less absolute benefit than owners.

You can buy fractional shares from robinhood for $10. The internet has brought a great democratization of access to the stock market.

If you don't have an investment program, the best time to start is right now.

The point is that workers have far less money to save. Therefore when stocks go up due to increased productivity, even workers who have enough money to save still don’t benefit, in absolute terms, as much as owners.

Becoming an owner by founding a company is the way to reach the top tier. Jobs, Gates, Bezos, Musk, etc.

BTW, I know a person who worked as a fruit picker as a young man, he's now a multimillionaire. And a woman who grew up in a mobile home who is now worth 9 figures.

America is a great country.

P.S. my first business was selling greeting cards door to door.

Unfortunately our society’s structure is such that only a small number of people can ever be wealthy. They do this by belonging to the ownership class. There is not enough room there for everyone, because owners make money simply through owning, because others do the work for them, while the owners pay themselves with the profits these workers generate for them.

> Unfortunately our society’s structure is such that only a small number of people can ever be wealthy.

History says otherwise. The mass immigration to the US in the 1800s was all poor people arriving with nothing but a suitcase. They moved up into the middle class and beyond en masse.

Middle class people live better than medieval kings.

That's not the definition of wealthy. Wealthy is a relative term. It's meaningless to say that a lower middle class person today is wealthy just because people 500 years ago could only dream of the things they have. If other people in the society they currently live in have a million times more, they are not wealthy.

I'm sure you understand how capitalism works. If you do, you should understand that not everyone can be an owner, someone has to do the actual work.

> not everyone can be an owner

Anyone with $10 and a phone can be an owner of the means of production (by buying stock).

> It's meaningless to say

The meaning is the massive improvement in the standard of living due to free markets.

BTW, if being "poor" means being in the bottom quintile of income, there will always be "poor" people, regardless of how well they live.

That's like saying anyone with legs can be a professional runner. In theory yes, but not in practice, not in a meaningful way.

Defining poverty as bottom quintile is also useless, yes. Defining poverty by comparing to the average or median income is the most useful definition. Someone earning less than half of average, for example. That tells you how well they can afford the limited resources of any society, as those track the average purchasing power.

Living standards have risen due to productivity gains being distributed across society. Factors such as wise policy and labor unions contributed to this effect. These factors are largely absent today. Productivity gains have flowed mostly to the ownership class since the mid 1970s (this is the pay-productivity gap). As the article notes, 50% of people identify groceries as a major cause of stress, which doesn’t sound like a medieval king. Society has the capacity to make life better for everyone. It requires collective action to redistribute wealth from the ownership class across society however.

Even raising living standards for the poor through redistribution wouldn’t solve all our problems. Concentration of wealth is itself a net negative because it is concentration of power. Greater wealth concentration makes society more undemocratic, even if the bottom 50% were to become richer. Today billionaires have so much money that a group of them has gotten together to fund the abandonment of democracy in the US. They are largely succeeding. We are collapsing into “illiberal democracy” - a phenomenon that has been spreading across the globe in recent years. Our greatest problems, like climate change, worsen as wealthy interests prop up policies of denial rather than effective solutions.

A medieval king had political control. If society was heading in a direction that was going to harm them, they could do something about it. But members of the modern day middle class have virtually no political control. That is concentrated in the hands of the few and harms us all.

But this is not meaningful. If I buy 10 dollars of stock, at 10% return I am earning 1 dollar per year. This amount is not relevant to my life in any way and is probably dwarfed by variation in the amount of cash I find lying on the ground annually.

It's like saying everyone has access to clean water, look over there, there's a drop.

Anybody can legally buy stock.

It is substantially more difficult to acquire a large amount of stock if you don't earn a lot of money, since there is naturally far less leftover after your expenses are paid.

And further, stock can be purchased with dividend payments. So the rich can afford an ever increasing piece of the pie even if they don't labor at all.

It's amazing how much you can accumulate by steady investment, and reinvesting what you have.

This is the definition of an asset bubble in my books. In 2007 +/-, this is exactly what happened with housing prices. People would buy an asset and watch it appreciate doing nothing.

Why go to your forklift operator job at Home Depot if you can make $50K per year in asset appreciation by sitting and doing nothing?

If you want a flow, here you go: https://fred.stlouisfed.org/series/A053RC1Q027SBEA

Corporate profits in the U.S. have almost doubled since 2019.

That has other issues. For instance change in ownership structures (eg. mom & pop shops selling up to private inequality) would change this figure without anything else changing.

The statistic for "Share of Labour Compensation in GDP", which avoids such issues shows that while it has dropped (ie. more money going to capital), the scale is grossly exaggerated.

https://fred.stlouisfed.org/series/LABSHPUSA156NRUG

All these "doubled since 2015/2019/20whatever" stats tie back to a dirty word that starts win In and ends with "flation"

And, as everyone who wasn't lying for various reasons predicted and anyone can see by looking at prior comparable events in history can tell you, wages are one of the last things to go up.

You do realize that inflation hits at least as much for employees though right? (Likely even more, because all things equal, you're still better off if numbers are bigger)

If anything, you'd be strengthening cameldrv and Epa095s point...

Inflation is typically better for the wealthy. Cost of living goes up. This hits you if you are a worker. But if you’re wealthy this is a small dent in your budget at best. On the contrary, you hold many assets, which generally appreciate with inflation, effectively hedging away the negative effect.

Bro, the CEOs said on conference calls it wasn't about inflation and bragged about their profits.

https://www.theguardian.com/business/2022/apr/27/inflation-c...

https://groundworkcollaborative.org/work/big-profits-in-smal...

Bro, they have to. If they said they were making double because dollars worth have stonk no go up.

Bro, they account for the dollars worth in their calls though.

It's not quite as bunk as that. If you take the time-derivative of the stock price it becomes a flow, and as stock prices are approximately exponential, the growth rate will be half of what it is today at approximately the same time range that the value itself was half of what it is today. (Obviously, with a lot more noise added).

Good point. Doubling in 7 years means around 10% growth per year. So, if someone took out 10% of their stock nest-egg per year, it wouldn't have grown at all.

Having said that, GP does illustrate Picketty's point in Capital in the Twenty-First Century that r>g, that is return on capital is greater than economic growth, and Picketty did theorise that this would inevitably lead to concentration of wealth (unless war or other calamities reset the scale).

I am sure the point must be more sophisticated as even with 0% growth there would still be significant return on capital (risk free rate + acceptable risk premium). That is to say the world where return on capital is not greater than economic growth doesn't make any sense.

The point is not whether or not it makes sense. The point is that it is fairly natural for a capitalist system to have r>g and that causes concentration of wealth. If you look historically the increasing concentration of wealth only really gets reversed by wars or revolutions. So what Piketty is arguing for is a more gentle way of redistributing wealth, because typically when one gets to 1914 levels of inequality, well… we know what happens.

> because typically when one gets to 1914 levels of inequality, well… we know what happens.

When it comes to resource sequestration this is a fundamental law of nature. There's no safety in a world where random people on the street see your death as a biological imperative.

At the risk of being pedantic, is a "piggy bank" really the right metaphor for this? A piggy bank has actual money within it, regardless of what I think of the piggy bank, it still has money within it. While a stock's total market cap technically only represents the last transaction price multiplied by the number of outstanding shares (kinda). Anyway, just making the point that it isn't like a "bank" in that there is not money in a container of any sort (obviously, banks lend out their own deposits so even my correction is also wrong).

I'm don't have anything better to replace it with, but I am just questioning the "piggy bank" as a metaphor here.

> Moreover stock prices incorporate a variety of factors that are irrelevant to wealth distribution.

This handwaves away the most important fact w.r.t. stocks and wealth distribution, which is that wealthy people own stocks and poor people don't. A whopping 38% of Americans don't own any stock.

Isn't the point still valid if you consider just the return on capital? If the market cap of the S&P500 was about 18 trillion in 2015 and returns 10%, the income going to to the owners of that capital is 1.8 trillion. In 2025 the market cap is 53 trillion, and a 10% return is then 5.3 trillion. That's an increase of almost 300%.

Now if the average salary was 48,000 in 2015 and there were 150 million people employed in the us, that's 7.2 trillion. The 2025 average is about 66,000 with 160 million employed. That's about 10 trillion. Around 40% increase in income going to labor. Am I missing something?

People who have less flow and no stock can increase their savings less than those with stock and the same flow. Many are not able to save at all. Those without stock receive only flow. Those with stock receive both flow and stock, and those with more stock profit more from rising stock.

So the relationship between stock and “flow” is absolutely relevant if we want to understand wealth inequality, because the working class primarily receives money through wages (most of it going out to pay for things such as basic necessities), with the ownership class accruing profit that they receive by virtue of ownership.

It's still a really silly comparison.

> People who have less flow and no stock can increase their savings less than those with stock and the same flow.

If they have savings they can buy stock. Nobody is sentenced to have savings only.

> with the ownership class accruing profit that they receive by virtue of ownership.

Anyone can buy stock with less than $100 and thereby join the ownership class.

Workers savings doesn’t change the fundamental dynamic. Their savings are dwarfed by those of their bosses. So when stocks double, workers, even accounting for savings, benefit far less in absolute terms than owners. Assets under capitalism follow a Pareto distribution - a minority owns a majority of the wealth.

And having $100 in savings doesn’t free someone from wage labor.

To get big money, you need to start your own successful business. But still, investing in stocks can make you quite comfortable.

Indeed. At the bottom of the income ladder, $100 is critical. Lots of surprise bills can be more than that, and failing to pay them can cause further income reductions. This is why I support a strong welfare system: it lets everyone survive when things hit the fan.

But if you can put aside $100 per month, for a while now it's been possible to put even that little into the stock market. Exact growth is highly variable and depends on what you actually invest in, but it's not implausible that over 20 years, less than half a normal working lifespan, this would have turned $24k spend into $70k present value. It's not the millionaire's club, but it's a lot for someone who only had $100 they could stand to put aside each month.

I wouldn't recommend anyone puts their last $100 into the stock market, or even to let themselves dip bellow $1000 in cash at any point unless they're in an extremely low cost of living nation.

Another way to say that is comparing velocity to distance traveled is not meaningful.