Business Insider – by HENRY BLODGET
The U.S. recovery from the Great Recession is still one of the worst recoveries in history (see red line at left).
Why is the recovery so slow and weak?
One of the main reasons is that average American consumers, who account for the vast majority of the spending in the economy, are still strapped.
Five years after the recovery began, unemployment remains high. And the Americans who are lucky enough to be working are getting paid less as a percent of the economy than they ever have in history.
Meanwhile, America’s corporations and their owners have never had it better. Corporate profits just hit another all-time high, both in absolute dollars and as a percent of the economy. And U.S. stocks just hit yet another record.
Many people seem confused by this juxtaposition. If corporations and shareholders are making such gargantuan piles of money, why is the economy so crappy?
The answer is that one company’s employees are other company’s customers. Americans save almost nothing, so every dollar your employees earn in wages gets spent on other companies’ products and services (including, in some cases, yours). The less American companies pay their workers, the less American consumers have to spend. And the less American consumers have to spend, the worse the economy is.
This isn’t a complex concept. We’re all in this together.
There’s also no “law of capitalism” that says that companies have to pay their employees as little as possible or “maximize profits” to please their owners. That’s just a story that the owners made up to justify taking as much of the company’s wealth as possible for themselves.
And the longer American corporations and shareholders insist on taking an ever-greater share of the country’s wealth for themselves, instead of sharing it with the people who create it (employees), the longer our economy will suffer.
Let’s go to the charts …
1) Corporate profit margins just hit another all-time high. Companies are making more per dollar of sales than they ever have before. (Some people are still blaming economic weakness on “too much regulation” and “too many taxes.” That’s a bunch of crap. Maybe little companies are getting smothered by regulation and taxes, 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” 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.
In short, the main reason our economy is still weak is that our obsession with “maximizing profits” is creating a country of a few million overlords and 300+ million serfs.
Don’t believe it?
Flip through these charts … AMERICA TODAY: 3 Million Overlords, 300 Million Serfs
Read more: http://www.businessinsider.com/profits-high-wages-low-2014-3#ixzz2vCWLJfpL
Yes, these companies have always said and thought that if the employee doesn`t go for it, that the employee is replaceable.
I also thought that the minimum wage was originally a starting/training wage. Remember when they said that people?
“There’s also no “law of capitalism” that says that companies have to pay their employees as little as possible or “maximize profits” to please their owners. ”
Well to begin with, the founders of our country never espoused “capialism,” in fact they had laws against it. What they established was a free market, within the borders of the United States, devoid of corporations. Corporations were never granted charters in any state in the Union, unless they served a public purpose.
Wages were always subject to the same law of supply and demand that any other good or service is subject to. While a free agent can pay more than the lowest price for a good or service, it is human nature to pay the lowest possible price, including the price for labor.
If we returned the country to the philosophy of our founders, we’d get rid of the corporations that corrupt our government and import cheap labor that destroys our lives.
http://americandictators.blogspot.com/2013/07/the-appetite-for-other-peoples-liberty.html
The problem with the country is that everything is a lie and a fraud now. If you would have told me something many years ago I would have believed it. Now I don’t believe anything. I tried to decipher what was real and what wasn’t. Now every word that comes out of the mouths of the main stream media is a lie. Everything in their system that they are so proud of creating is to screw the American worker. Just think of it. When the American worker tries to get ahead and get some money in the bank some scam artist tries to take every dime you got. It’s all about power and control and I don’t know about everyone else but I am freakin sick of it. How can you run a country like this. We have some freakin psychos running what once was a fantastic country. Did you know I walked down the street today and a drone flew over and asked what the hell do you think you are doing.
Now??
Consider it may be you that has changed in the way you take in information & draw conclusions in comparison to how you did X, Y or Z years ago.
Likely, things have not changed in that regard over the years – human nature has not evolved in a few years or decades.
Enjoy the realization & put the insight to good use.
You want to go ahead and believe the main stream media then help yourself. I am not bitter. I am actually saying what most people around here have been discussing for a while. Maybe you are one of those Wall Street people. I don’t know.
“Free” trade and mass immigration are the twin KEY destroyers of our economy. Only TARIFFS and strict immigration controls will allow our economic decline to be reversed.