by Karl Denninger, Market Ticker:

I hate being right.

If the labor market is “tight” then wages will rise rapidly until it is in equilibrium.

That hasn’t happened, and there are only two reasons it hasn’t: (1) You’re being lied to and the unemployment rate isn’t under 5% or (2) the employer has no more money with which to bid irrespective of the tightness of labor supply.

In other words either the statistics are a lie or the people who would hire can’t offer more because they are unable to pass through any more cost to their customers — they have determined that their customers cannot pay.

From this morning’s personal income and spending report:

The income of small business owners has turned negative both for farm and non-farm.

Remember that personal income is different from corporate income. Personal income is after direct expense to generate it, other than taxes (which are separately accounted for in this table) while corporate income is otherwise called revenue and has the expense side of the ledger as a completely-separate entity.

How much mention did this get this morning in the financial media? Zero.

Gee, I wonder why…..

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