More bad news for working people. Travis Waldron of Think Progress reports that corporate earnings have increased 20x more than workers’ disposable incomes since 2008. Waldron present another sickening statistic: “From 2009 to 2011, 88% of national income growth went to corporate profits while just one percent went to workers’ wages, and hourly earnings for workers actually fell over that time.”
As Waldron asks, if the job creators (also known as the “makers”) are doing so well, where are the jobs? We might add the questions: Where are the raises? Where are the healthcare increases? Where are the 401K matches? Why doesn’t Marissa Mayer provide her employees the same on-the-job day care she gives herself? It’s pure, simple greed.
Conservatives condemn government action to support workers as a matter of “picking winners and losers.” Given Waldron’s report, workers clearly have been the losers over the last five years. When will they get to win?
I was listening to Ed Schultz’s radio show today, which included an interview with the great union leader Leo Gerard, President of the United Steelworkers, who asked this question: Why do CEOs and executives get the security of contracts? A small faction of unionized employees have such security, but that piece of the labor pie gets smaller every day. The best paid employees – the executives – are also the most secure.
Corporations now specialize in transferring risk from the company and executives to workers. I met with a client today who drives a small truck. His company is being put out of business by competitors that require drivers to purchase their trucks and routes, which is a method FedEx uses for some of its vehicles. When the company is no longer responsible for the vehicle, it can cut its price while increasing its profit. The company wins, so does it customer. Who loses? The employee who now has to own the truck, maintain the vehicle, and eventually replace it.
This example is just one way that workers are carrying the burden of “productivity.” The more a company can ask of its workers: own the vehicle, own your tools, pay for your entire pension, pay for most of your health care; the more it can take as profit. Those who believe in the “free market” will argue that these business models would be impossible if workers did not accept the terms. I think a more accurate way of describing this situation would be that desperate people will make bad choices. Those bad choices will cause all of us to suffer. First we will pay more to support social programs accessed by low wage workers. The next step will be much worse. What happens when wages fall so low that the shrinking middle class can’t subsidize the system that pushes money up? Our lives will be very ugly.
We need a system that offers real security as well as the opportunity for reasonable profit. Our current system is out of balance, asking the least of those who have the most, setting up a system where those who are most secure are getting even more security.
In today’s Chicago Sun-Times, Mary Mitchell introduces us to the people who are on strike against Caterpillar, a company that had a 67% increase in profits for the second quarter. Mitchell takes us beyond the cliché of spoiled union workers and introduces us to real people and the struggles they are facing. Take a few minutes to read this column. It gives voice to people who too often are ignored by the corporate media* and too often reviled by their fellow workers.
* Yes, the Sun-Times is a corporation. Unlike the city's other paper, it can sometimes look at issues that affect working people and the poor. The paper investigates issues that matter to Chicago, and it has great columnists in Eric Zorn, Mary Mitchell, Roger Ebert, and Rick Telander. Do I like all of its writers and editorial policies? No. But it hits more than it misses.
Think Progress reports that 89% of income growth since 2009 has gone to corporate profits. Wage earners have only received 1%. Workers are losing while the country’s most wealthy corporations are taking more and more. The late Senator Ted Kennedy put it best, “When will the greed stop?”
On a positive point, nearly 100,000 people have signed Senator Bernie Sander’s letter to President Obama that urges the President not to give in to Republican pressure to cut social programs. Based on the statistics above, do the rich need even more?
Click here to read and sign the letter.
Compare this to a chart of corporate profits.
This game doesn’t need a scoreboard. The winner’s obvious, and the game is fixed.
The February edition of Inc. magazine provides these interesting numbers. Since the fourth quarter of 2008, U.S. corporations have earned $609 billion in profits.
Over the same period, the same companies have cut wages and benefits by 171 billion.
If this is the worst economy for the Great Depression, it seems to be pretty good for a few people. The rest of us are waiting for the recovery. We might be waiting for a long time.
Writing in Common Dreams, former Labor Secretary Robert Reich analyzes the relation between corporate profits and unemployment. We’d expect companies with profits to be hiring and expanding operations. Many large companies are expanding – outside the U.S. Reich explores the dilemma of a country in which companies won’t hire until consumers spend, and consumers can’t spend if they have no jobs.