Corporate Profits Hit Record High While Worker Wages Hit Record Low

[Melinda]

A constant conservative charge against President Obama is that he is inherently anti-business. However, businesses keep defying the storyline by making larger and larger profits, rebounding nicely out of the Great Recession.

In the third quarter of this year, “corporate earnings were $1.75 trillion, up 18.6% from a year ago.” Corporations are currently making more as a percentage of the economy than they ever have since such records were kept. But at the same time, wages as a percentage of the economy are at an all-time low, as this chart shows. (The red line is corporate profits; the blue line is private sector wages.):



Corporations made a record $824 billion in profits last year as well, while the stock market has had one of its best performances since 1900 while Obama has been in office.

Meanwhile, workers are getting the short end of the stick. As CNN Money explained, “a separate government reading shows that total wages have now fallen to a record low of 43.5% of GDP. Until 1975, wages almost always accounted for at least half of GDP, and had been as high as 49% as recently as early 2001.”

Article and citations at Think Progress

There is something inherently obscene about the above. When people have to choose between medicine or rent, shoes for their children or hot water to bathe in, it's time to start demanding a living wage for ALL American workers. Long past time.

[Cal Carpenter]

1. Rinse, repeat

Feel like I've seen this headline before. And before that, and before that...

[Ya Basta]

2. So much for the trickle-down theory

That's the first thought I get when seeing this chart.

[Egalitarian Thug]

3. Four decades of steady decline.

The good news is that we are fast approaching the point where a critical mass of people have had all they can or will take.

[Melinda]

4. Indeed... I've been thinking the same thing for years now.

History repeating and all, oui?

oui.

[Sherman A1]

28. Agreed

The working folks have had more than enough. It's a grassroots response and naturally disorganized, but they are pushing back.

[rhett o rick]

5. It apparently isnt bad enough to get the Republicans out of Congress. nm

[dreamnightwind]

6. Excellent graphic

and so sad!

Seems to me this is the inevitable result of tax policy, trade policy, and labor policy, all of which were rigged by corporate lobbyists and corporate-sponsored politicians to accomplish exactly what we see in this chart.

[Initech]

7. Same shit, different year. More for them less for us.

[bvar22]

8. THIS ^^^^ is the single Most Important Post on DU...

...since the announcement of the Re-Election of President Obama.

THIS should be at the VERY TOP of the National Dialog.

THIS MUST be REVERSED,
and a meager 3-1/2% tax hike on the very RICH ain't gonna do that job.

As a unified Democratic Party (The Party of the Working Class), we should be fighting FOR the Tax and Trade Policies (International, Interstate, & Local) of the 50s and 60s that built the largest, wealthiest, and most upwardly mobile Working Class the WORLD has ever seen.



[font color=firebrick][center]"There are forces within the Democratic Party who want us to sound like kinder, gentler Republicans.
I want a party that will STAND UP for Working Americans."
---Paul Wellstone [/font][/center]
[center][/font]
[font size=1]photo by bvar22
Shortly before Sen Wellstone was killed[/center][/font]


"By their WORKS you will know them."


[font size=5 color=firebrick]Solidarity![/font]

[Melinda]

10. Truth-Out: Five Facts About America's Pathological Wealth Distribution

This one too. I keep thinking WP will be posting it as an OP any moment...

PAUL BUCHHEIT FOR BUZZFLASH AT TRUTHOUT

The Rich Get Richer

Most people associate inequality with the income gap. As distorted as the distribution of income may be, our wealth distribution is even more extreme. Americans are beginning to realize that years of preferential tax treatment for the rich, under the guise of "supply-side job creation" nonsense, have bloated the fortunes of the super-rich to a level that would make Rockefeller and Carnegie envious.

1. We're close to being the most unequal country in the world.

Among countries with at least a quarter-million adults, only Russia, Ukraine, and Lebanon are more unequal, according to the most recent figures from Credit Suisse Research.

An earlier report by the same research team had indicated that Denmark and Switzerland were more unequal than the United States. While Switzerland is still high in the new data listing, ranking 18th, Denmark is actually rather equal relative to other countries, and received its dubious earlier position due to its own accurate reporting of household debt, as will be noted in Fact 5 below.

2. Wealth accumulation has been rigged for the rich.

The richest quintile of Americans owns 93% of non-home wealth. For Americans with incomes over $10 million, nearly half of their income comes from capital gains and dividends, on most of which they pay only a 15% tax. From 2002 to 2007, two-thirds of all income went to the richest 1%. Then, in the first year after the recession, a startling 93% of all new income went to the richest 1%.

http://truth-out.org/buzzflash/commentary/item/17669-five-facts-about-america-s-pathological-wealth-distribution

[TheKentuckian]

14. Neato! Our distribution is worse than countries with Sultans and kings.

American capitalisim...making feudalism look better by the day.

[sheshe2]

11. Senator Wellstone!

We salute you!

[woo me with science]

12. Amen. nt

[kentuck]

9. But that's OK....

Maybe we can find another taxcut for the workers to make up for no pay increases?

[MrMickeysMom]

13. This graph is a talking point all by itself...

It just screams, It ain't happening for us!", isn't it? What a graph!

Another thing... If I hear one more news person mention how we might include extending the 2 percentage point Social Security payroll tax cut, I will punch them right through the TV set.

How dumb are we supposed to be in thinking that defunding what we rightfully pay into for our own safety net should be fucking ROBBED, anyway?

What the fuck, people...

[AlbertCat]

15. C'mon people! Who cares about this????

Don't you know there's a BLACK MAN in the White House????

What are we gonna do????



















(do I need this?)

[Uncle Joe]

16. Kicked and recommended.

Thanks for the thread, Melinda.

[ErikJ]

17. Movie "Idiocracy"-everybody lived on corporate dividends

I think thats how it went. Are we headed to the same thing. WHen the corporations dont need human workers anymore and everybody is unemployed, that might be the only option.

[indepat]

18. There is something inherently obscene when the electorate returns the likes of

Heron Bachmann, Herr Cantor, Herr Ryan, and Herr Boehner to office considering they and their ilk are the architects of the policies which have driven wages down.

[moondust]

19. What happened around 1970?

It looks like a very favorable wage environment for workers going into that ~1970 recession but then something apparently happened to turn the tables. Did Nixon do something?

???

[Art_from_Ark]

22. Inflation started kicking into high gear around 1971,

and wages started lagging behind the inflation rate.

Then in the '80s, Reagan's tax cuts for the rich (bringing the top rate down first from 70% to 50%, and then from 50% to 28%) while imposing higher payroll taxes on workers exacerbated the income gap. The '80s also saw an acceleration of outsourcing of high-wage jobs and a growing shift toward lower-paying service jobs.

[moondust]

23. Wouldn't inflation affect corporate profits as well?

Doesn't inflation affect everything more or less equally?

The graph makes it look like around 1968-70 something drastic suddenly jarred corporate profits out of a slump and started wages on a long decline, like maybe a law was passed or something. ??

Did the Dem convention of 1968 change public sentiment that much?

[Art_from_Ark]

24. Inflation meant higher corporate profits in actual dollar terms

That is, corporations raised prices of goods to compensate for their higher costs, but did not give their employees cost-of-living pay increases that kept up with the inflation rate. Or, sometimes they laid off workers and pocketed the difference.

Having lived during that era, I would say that increased corporate profits in the late '60s could have been spurred by escalation of the war in Vietnam and increased defense spending, as well as the Space Race, while the '70s saw the transition to a fully fiat currency, Nixon's wage-price controls, and two oil crises, among other things.

[moondust]

25. Thanks Art.

[Art_from_Ark]

26. I should add that Great Society programs,

which were getting into high gear in the mid-'60s, helped to put more disposable income in the pockets of people in the lowest income brackets, who would be more inclined to put that money right back in circulation.

[Egalitarian Thug]

27. What happened in 1970 - 1972 was OPEC and what we now call the Too Big To Fail banks.

The OPEC nations, especially Saudi Arabia, after robbing America and the world, began pouring unprecedented mountains of money into these institutions and created the monsters that are devouring the world today.

I don't suppose you want a really detailed explanation, but you see how that blue line (wages) peaks about 1969, and that red line (corporate profits) hits its nadir about 1971? Well, that's when the the world as we built it ended.

Had Nixon not been a wholly owned subsidiary of oil money as well as a severely damaged sociopath unable to see past his own rage and insecurity and had he done what a better man would have and listened to the people he purported to lead, well the world today would be a completely different, and almost certainly much better, place today.

[joeunderdog]

20. this should be on the front page of every newspaper.

they'll still claim that this is precisely how we can help the poor.

[young_at_heart]

21. The Bush years tell the story---WOW

After 2000 the change is simply unbelievable. You'd think the diehard GOPers would take notice of how they hare been marginalized!

[progressoid]

35. See no evil...etc.

[HiPointDem]

29. kr.

[marions ghost]

30. I keep wondering

how long people will put up with this.

Americans capacity for taking blow after blow is amazing.

[davidn3600]

31. People will put up with it until they are starving

No one is going to risk their job and put their family in jeopardy.

[marions ghost]

34. I guess that's how

people ultimately get turned into trons for the rich.

I see people doing heroic things to keep going in America. Losing everything because of illness, worrying constantly, stressed and ready to snap--but they keep chugging. I admire American ingenuity and all that, but I see this as more like the abused wife who just keeps putting up until she's destroyed.

Do you think Americans in general are happy these days?--I don't.

[Selatius]

32. It took a Great Depression just to get the New Deal enacted into law.

In those days, people were rioting just for food and water.

If it took the Great Depression to get something like the New Deal, it makes me wonder what it would take to turn things around. It's kind of frightening how far a population will let itself fall before it fights back.

[marions ghost]

33. For some people

this IS a Great Depression. They might have water but I don't think they always have food. Americans have a lot of pride and don't want to admit they're not making it I think. But I just don't know what makes people keep on thinking everything's OK. Maybe they just can't believe this would be happening in America.
Denial.

I've been to other countries where I KNOW people would not put up with what Americans put up with.

[Romulox]

36. Thank GAWD it passed! nt