The Divergent Paths of Wall Street, Main Street

Contrast that with what's happening on Main Street. Unemployment remains high, at more than nine percent. That's a daunting figure considering the recession officially ended two years ago. Some economists think the number could trickle higher even in coming months.

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But that's not the hardest part of Main Street's story. Wages among the middle class employed are flat, and many people are now doing jobs and daily tasks that three and four people did just several years before. So as corporate profits jump with increases of 20 percent or more to all-time highs, and stocks rise on Wall Street in accord to levels near all-time highs, Main Street America is shuffling along a different path, trying to keep up in the new, new economy.

The reason for the opposing trends is clear. In the recession, companies became obsessed with avoiding the one cost that's hardest to control: payroll costs.They can quickly reduce inventory, they can quickly delay technology investment, but they can't quickly and easily shift from bloated payrolls.

Also, companies are benefiting from the adage that any job in a slow-growth economy is a good job -- meaning those that have work are quick to take on more responsibilities so they can keep their job, and even earn more. Thus, companies have little incentive to start hiring again in large numbers. They are merely driving more productivity out of what they have, or shifting how they've done it before by relying upon more technology to drive revenues forward.

Companies are still hiring, sure. But they are filling positions that are clearly needed, perpetually delaying what's not clearly needed.

Back in the day, in the years before the recession, many large companies routinely shuffled in large numbers of new employees, to keep an ever-flowing stream of talent to train and cultivate. Now, though, lean is the operative mode when it comes to payroll, meaning the interests of Wall Street and Main Street are traveling along divergent paths.

Corporations are finding lower-priced alternatives in many instances by looking globally and outsourcing high-skilled labor jobs, and they have used technology to streamline other operations, reducing personnel needs.

For investors, this is good news. Those with capital to invest during and after the recession have gained wealth. But they have also gained advantage over working class Americans who live paycheck to paycheck.

Sensitivities are growing nationally over the issue, particularly since the U.S. government invested heavily during the recession with taxpayer dollars to keep many companies and industries afloat. The argument made at the time was that companies must be strong so job growth can resume.

Right.