It is a common conversation at kitchen tables across Canada: "I am working harder than ever, so why does it feel like I’m standing still?"

If you feel that way, you aren't imagining it. The math is backing you up.

Take a look at the chart below. While this specific data is from the US, we are seeing a nearly identical trend right here in Canada. It shows two lines moving in opposite directions, and that gap explains the modern economic struggle.

The Two Lines

• The White Line (Wages): This represents total wages as a share of the economy. For 40 years, it has been in a steady decline.

• The Green Line (Wealth): This represents the value of the stock market relative to the economy. It is currently sitting at historic highs.

Ownership vs. Effort

I have always been a firm believer in capitalism and the power of the markets. Capitalism is the greatest engine for growth we have, but we have to be honest about how the engine is currently tuned.

Right now, the system is rewarding ownership (the green line) far more than it rewards effort (the white line).

Our tax system was built decades ago when the white line was dominant. We fund our society primarily through income taxes—taking a slice of the paycheck. But as that slice of the pie gets smaller, the government eventually runs into a math problem.

The Coming Tax Shift

We saw a glimpse of this reality recently in Canada. The government attempted to increase the capital gains inclusion rate to tap into that "Green Line" wealth. While that specific plan didn't pass, the motivation behind it isn't going away.

Governments everywhere are realizing they can't fund a 21st-century country solely on the backs of a shrinking wage share. At some point, the tax model has to change because you can't get enough blood from a stone.

The Ganhos e Gastos Reality

At Ganhos e Gastos, we talk a lot about the importance of saving and investing. We know it is getting harder to do. When your wages are a smaller part of the economy and the cost of living is rising, finding that extra bit of money to invest feels like an uphill battle.

However, this chart shows why it’s no longer optional.

If you rely 100% on a paycheck, you are tied to a shrinking line. To find true security in today’s world, you have to find a way to move some of your energy into the "Green Line." You have to become an owner of assets, not just a provider of labor.

The gap between wealth and wages is wider than it has ever been. Understanding that gap is the first step toward making sure you and your family aren't left on the wrong side of the math.