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Profits Just Hit Another All-Time High, Wages Just Hit Another All-Time Low

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TheDemSocialist

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1) Corporate profit margins just hit another all-time high. Companies are making more per dollar of sales than they ever have before. (And some people are still saying that companies are suffering from "too much regulation" and "too many taxes." Maybe little companies are, but big ones certainly aren't. What they're suffering from is a myopic obsession with short-term profits at the expense of long-term value creation).

2) Wages as a percent of the economy just hit another all-time low. Why are corporate profits so high? One reason is that companies are paying employees less than they ever have as a share of GDP. And that, in turn, is one reason the economy is so weak: Those "wages" are represent spending power for consumers. And consumer spending is "revenue" for other companies. So the profit obsession is actually starving the rest of the economy of revenue growth.
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Read more: Profits At High, Wages At Low - Business Insider

Cmon trickle! Trikcle down damnit! Were waiting! Oh wait that was bull****?
 
Awesome. Maybe my insurance companies that invest in all these businesses won't need to raise my rates as high next year as they did this year.
 
TheDemSocialist said:
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Read more: Profits At High, Wages At Low - Business Insider

Cmon trickle! Trikcle down damnit! Were waiting! Oh wait that was bull****?
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trickle down can work, though only inefficiently, in a contained labor economy. in a global economy approaching post-labor, though? not so much.

however, it's necessary to point out that the robot is even more to blame than the greedy CEO. we will need to take another look at our resource distribution model in the coming years. there simply isn't enough work to be done for profit to keep everyone employed, though I would argue that there are still plenty of things that need to be done. if conservatives want people to work for money, they are going to have to warm to the idea of the public sector as an employer.
 
Sure, robots are somewhat to blame...but so are company policy makers. For years this has been going on. Every place I've worked at tells the same story. How, years back, the job one person is frantically trying to do now, used to be much more easily done by three. Even where I currently work, I can look back on payrolls of years past, and see it plain as day. We're operating on about 700 hours less per month than they did in 2000, despite the fact that we have beaten previous years sales by no less than 5% for every single year since 2000.
 
Jack Fabulous said:
So you're saying that the policies of the last 4+ years have failed to generate the type of economic equality advertised during the campaigns?
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Well saying our economic policy at large has not changed since the 1980's and we still hold down to the principle at large of trickle down economics.
 
Jack Fabulous said:
So you're saying that the policies of the last 4+ years have failed to generate the type of economic equality advertised during the campaigns?
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4 years? Try thirty.
 
TheDemSocialist said:
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Read more: Profits At High, Wages At Low - Business Insider

Cmon trickle! Trikcle down damnit! Were waiting! Oh wait that was bull****?
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I don't know the answer, but since the size of the labor force is the lowest since back in the late 1970's, wouldn't it be obvious that the amount of money going to wages in the economy would naturally be much lower unless everyone received massive raises?
 
Deuce said:
4 years? Try thirty.
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Could you compare the last thirty years with some other thirty year period of time under different "policies" that was more successful so I could have some idea of what we're missing out on?
 
CanadaJohn said:
I don't know the answer, but since the size of the labor force is the lowest since back in the late 1970's, wouldn't it be obvious that the amount of money going to wages in the economy would naturally be much lower unless everyone received massive raises?
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Um, no. Look at the charts. Wages declined even as workforce increased.
 
If the government would stop dipping into the working man's pocket, wages wouldn't be so low.
 
CanadaJohn said:
The workforce is increasing? Someone should tell the Department of Labor they got it wrong.
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You know the chart goes back further than 2008, right?
 
apdst said:
If the government would stop dipping into the working man's pocket, wages wouldn't be so low.
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Feel free to plot tax rates against those charts, I think you'd be surprised.
 
CanadaJohn said:
It would have to go back prior to 1979 to find a time when the workforce was smaller than it is today. So what's your point?
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Chop off the end of the chart at the year 2000 and tell me what you see.
 
Deuce said:
Chop off the end of the chart at the year 2000 and tell me what you see.
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OK - what I see is a chart for percent of wages in the economy in a falling trend, with a bump up in the run up to 2007 which EXACTLY MIRRORS the falling trend in workforce participation which also had a slight bump up in the run up to 2007. This tells me that the level of workforce participation is directly related to the percentage of the economy wages play.
 
CanadaJohn said:
OK - what I see is a chart for percent of wages in the economy in a falling trend, with a bump up in the run up to 2007 which EXACTLY MIRRORS the falling trend in workforce participation which also had a slight bump up in the run up to 2007. This tells me that the level of workforce participation is directly related to the percentage of the economy wages play.
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What you see is a thirty year period where workforce trends upwards while wages trend downwards. If not for the intermittent recessions that crash wages along with workforce, you'd actually conclude that wages and workforce participation were inversely related.
 
Deuce said:
Feel free to plot tax rates against those charts, I think you'd be surprised.
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I never said anything about taxes. What makes you think taxes are the only way that the government can effect workers's wages?
 
Just heard on the radio that state revenues also hit all time highs. So why are there all those cuts in spending and employee days and such?
 
Deuce said:
What you see is a thirty year period where workforce trends upwards while wages trend downwards. If not for the intermittent recessions that crash wages along with workforce, you'd actually conclude that wages and workforce participation were inversely related.
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Well, you asked me to lop off the poll at 2000, so I misunderstood your intent. But if I go back as far as 1990, the past 23 years, what I described is absolutely correct. I will also note that in the late 1970s through much of the 1980s when we were all living though hyper inflationary times, increases in wages as a percentage of the economy far outstripped any increases in corporate profits during that time.

The answers are not as simplistic as some would have them be - improvements in productivity have been very evident in the US economy in comparison to many other world economies, as an example - automation, as mentioned by another poster, also is an issue.

We may disagree, however, that a business must share all its increases in profit with its employees directly. There may be other considerations, such as job security, benefits, ergonomic workplace improvements, etc.
 
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