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Sunday, July 24th, 2011

A Boom In Corporate Profits, A Bust In Jobs, Wages

Author:    
Source:     NPR
Publication Date:     22-Jul-11
 Link: A Boom In Corporate Profits, A Bust In Jobs, Wages
Stephan:   Here is what I take away from this article: This is the virtual corporate state at its most naked. VCSes make vast profit because they no longer have any national allegiance; their geography is the world. You can see from their patterns of focus and investment how little they care for the well-being of American society. They shelter in the U.S. because here they can to various degrees buy or control every branch of government, and protect themselves, while profiting from building the protection. You don't break laws when you make the laws. We are not going to get out of this crisis until we learn that a society's most important national asset is the quality of life of its people.

Strong second-quarter earnings from McDonald’s, General Electric and Caterpillar on Friday are just the latest proof that booming profits have allowed Corporate America to leave the Great Recession far behind.

But millions of ordinary Americans are stranded in a labor market that looks like it’s still in recession. Unemployment is stuck at 9.2 percent, two years into what economists call a recovery. Job growth has been slow and wages stagnant.

‘I’ve never seen labor markets this weak in 35 years of research,’ says Andrew Sum, director of the Center for Labor Market Studies at Northeastern University.

Wages and salaries accounted for just 1 percent of economic growth in the first 18 months after economists declared that the recession had ended in June 2009, according to Sum and other Northeastern researchers.

In the same period after the 2001 recession, wages and salaries accounted for 15 percent. They were 50 percent after the 1991-92 recession and 25 percent after the 1981-82 recession.

Corporate profits, by contrast, accounted for an unprecedented 88 percent of economic growth during those first 18 months. That’s compared with 53 percent after the 2001 recession, nothing after the 1991-92 recession and 28 percent after the 1981-82 recession.

What’s behind the disconnect between strong corporate […]

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