When it comes to wages, France is the best and America is the worst.
This chart, which comes to us from GMO Capital’s Jeremy Grantham, shows how inflation-adjusted wages in the UK and US have been flat over the last 40 or so years while France and Japan have enjoyed massive wage gains.
“For the 50 years I have been in America, Business Week and The Wall Street Journal have been telling us how incompetent at business the French are and how persistently we have been kicking their bottoms,” Grantham writes.
“If only they could get over their state socialism and their acute Eurosclerosis. And as far as I can tell we have generally accepted this thesis. Yet Exhibit 1 shows what has actually happened to France’s median hourly wage. It has gone from 100 to 280. Up 180% in 45 years! Japan is up 140% and even the often sluggish Brits are up 60%. But the killer is the U.S. median wage. Dead flat for 45 years!”
And overall Grantham’s outlook, as you’d expect, is pretty downbeat.
Grantham simply doesn’t think the economic truths we’ve all come to accept about the US — which in his view effectively amount to a collection of positive bits of misinformation — are true at all.
Not the least of which is the idea that US-style capitalism is what allows nations to live long and prosper.
Or something like that.
“These are the uncontestable facts,” Grantham writes. “So, all I can say is that it is just as well the French have not been kicking our bottoms. But how is it that we can believe so firmly in something that just ain’t so, and by such a convincing amount?”