Globalization may not yet be unraveling, but it is beginning to fray. According to Resolution Group head of research Duncan Weldon, if global economies continue on the path they’re on, the train will slowly go off the tracks.

One thing is clear: Global trade growth relative to GDP growth has stagnated since the Financial Crisis.

“The imported content of Chinese production has dropped considerably, whilst US manufactured imports—as a share of GDP—look to have stabilized after a large rise,” Weldon wrote. Protectionism and populist politics have also been on the rise.

Weldon believes the key underlying problem with the global economy is wage growth.

The chart below shows that wage growth since 1988 is elephant-shaped.

The body of the elephant represents the growing middle classes of emerging economies. The tip of the trunk represents the top 1 percent of earners in developed economies. However, the rest of the trunk is…

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