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Americans are enjoying year-on-year wage gains above 3% for the first time in over a decade according to two economic reports this week, including a monthly jobs report that came in comfortably above expectations.
The big picture: This isn't purely an American story. Budgets are getting looser around the world.
This year's U.K. budget marked the official end of austerity. Finance Minister Philip Hammond is "basking in the largest sustained windfall from improved public finance forecasts since the Office for Budget Responsibility was created in 2010," per the Financial Times.
Italy's government intends to run a budget deficit of 2.4% of GDP next year, which is unacceptable to the EU.
The other side: The euro-area economy grew at the slowest pace in four years during the most recent quarter. And in the U.S., inflation has been running at more than 2% per year, which makes 3% wage gains rather unimpressive.
Stock-market investors are grumbling these days, after a mere month or so of pain.
The market value of the Russell 3000 is down $3.5 trillion since Sept. 20. Only Brazil has seen stocks rise. Every other major market fell in October.
For solace, people invested in stocks should look at the Treasury market.
The bottom line: For most of the past decade, capital has fared much better than labor. Now, the tables are turned.
Illustration: Sarah Grillo/Axios
Facebook and Google should be afraid of being taxed on their annual revenues, rather than their profits.
The problem is that the current international taxation regime is based on profits, rather than revenues.
The Organization for Economic Cooperation and Development started an international discussion on how to deal with this problem in 2012. That discussion now involves 116 different economies, according to Josh Kallmer, senior vice president for global policy at the IT Industry Council. Predictably, little progress has been made.
The UK, Spain and other countries are attempting to light a fire under the OECD process. If a first-best international solution can't be found, they're saying, they will implement a second-best unilateral revenue tax.
The bottom line: The tech giants are extracting value from countries' populations much as oil companies extract value from countries' oil fields. If ExxonMobil can pay a royalty based on revenues, then why not Facebook?
Illustration: Lazaro Gamio/Axios
A stunning datapoint from Axios' Ina Fried: Apple's iPhone revenue rose by 29% in the most recent quarter, compared to a year previously — even as the total number of iPhones sold was flat.
Technology always plunges in price over time. Except, it seems, if you're Apple.
Context: The low end of the market, for both phones and computers, is dominated by Alphabet's Android and Chrome. Apple has neither the inclination nor the ability to compete on price against an open-source competitor, so it's not even trying. Instead, it's extracting maximum revenues from its existing customer base.
Open source couldn't be hotter right now: After Microsoft bought GitHub for $7.5 billion, IBM came along to buy Red Hat for $33.4 billion. That's fantastic for Red Hat shareholders, but it doesn't necessarily reflect a hugely strong underlying business.
The big picture: Open source is of central strategic importance to all tech companies, including Alphabet, IBM and Apple. But the tech giants vary widely in whether and how they decide to build it, buy it or counterprogram against it.
These workers are among the most valuable in the world, and Google CEO Sundar Pichai has no desire to antagonize them.
Pichai's in a bind. He's reportedly "meeting with his leadership team on Monday to review a plan that would address the demands" of protestors on Monday. The problem: It's not clear he's senior enough to do so.
The bottom line: The tech elites are revolting. This is only the beginning.
Illustration: Rebecca Zisser/Axios
Every year, 8% of Netflix employees get fired.
Put another way: If you're in a team of four people at Netflix, there's a 50% chance that at least one of you will get fired within two years.
Why it matters: Netflix's dystopian and demoralizing corporate culture has coincided with the creation of billions of dollars of shareholder value. There's no doubt CEO Reed Hastings considers those two facts to be related.
The punchiest and most compelling excoriation of sexism in the workplace you're likely to read this week comes from Natalie Portman (yes, that Natalie Portman) on Medium.
Driving the news: Women constitute 50% of graduates from law school, business school and film school — but only a small minority of the most successful professionals in those industries.
"The reason women in nearly every industry are not represented in powerful positions is because women are being discriminated against," writes Portman.
There’s a theory that’s often cited that women drop out of the workforce to focus on motherhood, or because the workplace isn’t conducive enough to rearing children. And I used to believe that too. But it always seemed suspicious as a reason — like a woman would spend hundreds of thousands of dollars on law school, and all the time and hard work to graduate, and all the hours and stress to pass the bar, and then work for years at a law firm, and then give up her 6 or 7-figure job that she loves and has invested so much into, because she didn’t ever consider she might have to find childcare for her kid? A woman who can probably easily afford childcare? It was confusing, but I bought it, cause, well, I don’t know. I’m a sheep.
Now, I would like to dispel that myth.— Natalie Portman, Why Women Leave
Not all fast-growing startups are disruptors. TransferWise is a prime example.
TransferWise has outperformed a raft of competitors to become the biggest startup in cross-border payments.
But: Western Union — the money-transfer giant founded in 1851 — is not being disrupted. Its volumes are remaining very steady, and its digital product is price competitive.
The big picture: For all the hype, blockchain companies have yet to make a dent when it comes to international payments. TransferWise proves that impressive growth is possible the old-fashioned way, by being cheap and reliable and not particularly disruptive at all.
Two former Goldman Sachs bankers were indicted on criminal charges this week.
Tim Leissner, the bank's former chairman of Southeast Asia, has already pleaded guilty. His colleague Roger Ng was arrested in Malaysia and will be extradited to the U.S.
Andrea Vella also appears in the complaint, as Co-Conspirator #4. He has been placed on leave by Goldman, just two weeks after becoming the bank's co-chairman of investment banking for Asia, excluding Japan.
Leissner stole money from Malaysia, embezzling development-bank funds for the criminal conspiracy. According to the complaint, "more than $2.7 billion was misappropriated by the defendant Tim Leissner and his co-conspirators." The complaint makes it clear that some of that money ended up going to Leissner personally, over and above his handsome Goldman Sachs bonus checks.
Goldman Sachs itself has not been charged, yet. It says that it "continues to cooperate with all authorities investigating this matter."
Why it matters: Goldman Sachs facilitated the greatest heist of the century.
The wealth of the world's billionaires rose by $1.4 trillion in 2017, the largest annual increase ever.
As an Axios reader, you're surely aware that Tuesday is a big election day in the U.S. The polls unanimously expect a Democratic victory in the House and a Republican victory in the Senate, so assume that's priced in to the markets. Go deeper.
Disney reports earnings on Thursday, the same day the Federal Reserve open market committee meeting ends. Virtually no one expects the Fed to raise interest rates, writes Courtenay Brown.
Built between 1963 and 1966, Richard Seifert's 34-story Centre Point tower has been a London landmark for more than 50 years. It famously remained empty until 1975, while its owner, Harry Hyams, was holding out for a single tenant.
After becoming a symbol of wasted square footage, Centre Point gave its name to a major UK charity for the homeless. The tower was converted to luxury residences in 2015; the penthouse is listed at £55 million. The building remains largely empty, with the international ultra-rich shunning London property until they have more clarity on the effects of Brexit.
This week in dystopia: Amazon's employing 20,000 fewer holiday workers this year; they're being replaced by robots. More than 500,000 African children will no longer receive a vital vaccine this year, after Merck decided to sell it to China instead. Booz Allen Hamilton, McKinsey & Company and Boston Consulting Group have all played critical roles in Crown Prince Mohammed bin Salman's drive to consolidate power. Do you know your customer lifetime value?