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The American middle class has suffered from painfully low wage growth since The Great Recession. In fact, 82% of Americans of suffering through the worst wage recovery since 1965. It was the first post-recession wage since 1965 without a single month above 2.7% YoY wage (or earnings) growth.
With shockingly low wage growth (particularly since 2008), American households are substituting consumer debt for slow wage growth. Take, for example, 1-4 unit mortgage and auto loan YoY growth. Since 1995, there was a mortgage credit bubble that eventually exploded. Now we have shifted gears and are relying on auto loan growth.
Of course there are credit cards and student loans. While wage growth is 2.7%, student loan growth is still growing at 6.4%.
Low wage growth and massive credit card and student loan debt growth. What could go wrong?
To quote Council Jamm from Parks and Recreation (again), you just got jammed!