It's no wonder: Income growth has stagnated, especially for the poor and middle class. For those in the lower 60% of the country in terms of household income, in inflation-adjusted terms, their earnings haven't gone anywhere since the late 1980s. In 1989, the average household income for these folks was $29,685, compared with $30,114 now.

Mean Household Income Received by Each Fifth and Top 5 Percent -- 2009 Dollars  © MSN Money

That has translated into rising income inequality as the top 5% of the population captures an ever-increasing share of the economy. Current levels of inequality haven't been seen since the lead-up to the Great Depression back in the 1920s.

But there is reason to believe things might get better soon.

Diminishing supply

The good news is some of the structural issues that have weighed on the working class are beginning to lift.

Higher fuel prices and geopolitical instability are increasing the costs of outsourcing and shipping from factories far afield. Surging inflation and wages in places like China, where the once seemingly inexhaustible pool of workers has started to diminish, are pushing up production costs. There are new reports of Chinese factories grinding to a halt for want of laborers. Even white-collar managers and engineers are being forced out of their comfy office chairs to spend time on the assembly lines. The lack of manpower is becoming acute in the Middle Kingdom.

These factors are combining to push up the price of Chinese exports -- and ontributing to inflation here in the United States. According to Société Générale economist Aneta Markowska, within the next few months the cost of trinkets made in China will start rising at a 2%-plus annual rate, versus the current core CPI rate of 0.9%. After 15 years of exporting "disinflation" to the West via shiploads of cheap manufactured goods, China is set to start spreading higher prices.

The longer this continues, the less competitive goods from China will become compared with U.S.-made products. That's a good thing from the perspective of the average American worker.

Markowska notes that she's seen "numerous reports in recent weeks about U.S. importers facing significant cost hikes and scrambling to find lower-cost production centers." Alternative exporters, such as Vietnam, Thailand and India, are being looked at. But it will take months, if not years, for companies to relocate production. And given the turmoil roiling North Africa and the Middle East, political risk is suddenly a very real concern again.

U.S. Dollar Index, 4 Years, Weekly Bars  © StockCharts.com

Such pressures make hiring workers and building things in America more attractive. Also contributing is a weakening dollar, which now threatens to fall through four-year trend line support, as shown in the chart above. While a weaker greenback always damages national pride and contributes to inflation by pushing up the prices of oil and imported goods, it also boosts our competitiveness -- turning the tide so the benefits of export-led growth accrue to United States instead of places like China and Germany.

Indeed, Intel (INTC, news) recently announced it will spend $5 billion to build a new semiconductor facility in Arizona that will create thousands of new jobs. And in recent months, measures of manufacturing and service-sector activity have blasted higher to new recovery highs. The ISM Manufacturing Index's employment sub-index pushed to its best levels since the early 1970s. Purchasing managers in the Chicago area indicated the fastest pace of activity since the late 1980s as new orders pour in.

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But make no mistake: We're a long way from out of the woods.

The consumer squeeze

We're now in a race against time, left hoping that job creation will ramp up before inflationary pressures can damage consumer and business sentiment and cause a growth scare like the one seen during last summer's eurozone debt crisis. And over the near term, consumers waiting for the new jobs and higher wages will be squeezed by rising commodity prices.

And for U.S. workers, the healing will be slow.

Markowska, of Société Générale, is looking for the unemployment rate to fall very slowly, ending 2011 at 8.7% and 2012 at 8.4%. It's at 9% now. That will help keep wage growth low for most Americans. UBS economist Thomas Doerflinger is looking for wage growth of just 2.7% this year and 1.5% in 2012 as the current payroll-tax cut expires.

The investing angles

As is often the case, investors can make moves to play into this trend. The team at UBS recommends avoiding consumer staples stocks, because they are vulnerable to higher commodity and energy prices at a time when many consumers are still cautious about spending. On April 1, Whirlpool (WHR, news) will raise the price of its washing machines by up to 10% as it tries to pass on higher steel costs. Kimberly-Clark (KMB, news) is just one of many toilet paper makers that have narrowed the size of their rolls in an effort to protect profits.

Another strategy is to embrace wage inequality -- because it isn't going away -- by focusing on the low end with retailers like Family Dollar Stores (FDO, news), and on the high end with retailers like Nordstrom (JWN, news).

At the time of publication, Anthony Mirhaydari did not own or control shares in any company mentioned in this column.

Be sure to check out Anthony's new money management service, Mirhaydari Capital Management, and his investment newsletter, the Edge. A free, two-week trial subscription to the newsletter has been extended to MSN Money readers. Click here to sign up. Mirhaydari can be contacted at anthony@edgeletter.com and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.