Current Events > Paychecks lag as profits soar

(+) Yeah! (+)

https://www.nytimes.com/2018/07/13/business/economy/wages-workers-profits.html

Corporate profits have rarely swept up a bigger share of the nations wealth, and workers have rarely shared a smaller one.

The lopsided split is especially pronounced given how low the official unemployment rate has sunk. Throughout the recession and much of its aftermath, when many Americans were grateful to receive a paycheck instead of a pink slip, jobs and raises were in short supply. Now, complaints of labor shortages are as common as tweets. For the first time in a long while, workers have some leverage to push for more.

Yet many are far from making up all the lost ground. Hourly earnings have moved forward at a crawl, with higher prices giving workers less buying power than they had last summer. Last-minute scheduling, no-poaching and noncompete clauses, and the use of independent contractors are popular tactics that put workers at a disadvantage. Threats to move operations overseas, where labor is cheaper, continue to loom.

And in the background, the nations central bankers stand poised to raise interest rates and deliberately rein in growth if wages climb too rapidly.

Workers, understandably, are asking whether they are getting a raw deal.

Sure, you can get a job slinging hamburgers somewhere or working in a warehouse, said Christina Jones, 53, of Mobile, Ala. Ms. Jones spent eight months searching for a job with living wages and benefits, after being laid off from a paper company where she had worked for nearly 13 years. Dozens of interviews later, she landed work last month at a concrete crushing company as an accounts payable clerk for $14 an hour two-thirds her previous salary.

You hear, Oh, the unemployment rate is as low as its ever been, Ms. Jones said, but it was discouraging.

Businesses have been more successful at regaining losses from the downturn. Since the recession ended in 2009, corporate profits have grown at an annualized rate of 6.5 percent. Several sectors have done much better. On Friday, for example, banks like JPMorgan Chase and Citigroup reported outsize double-digit earnings in the second quarter.

Yearly wage growth has yet to hit 3 percent. And when it does, the Federal Reserve which has a mandate to keep inflation under control even as it is supposed to maximize employment can be expected to tap the brakes.

As Fed policymakers have explained, allowing the economy to run too hot could lead eventually to a significant economic downturn. And persistent wage increases, unlike growing profit margins, are considered a signal that the heat is on.

The banks primary method of cooling the economy is to dampen spending and investing by raising interest rates and making it more expensive to borrow money an antidote that could hurt profits in some sectors as well as trim payrolls. The thinking goes like this: Better to inflict some pain now, in the form of higher joblessness and sluggish wage growth, than to allow more pain later.

...

The conventional wisdom that higher wages inevitably lead to higher prices, however, is flimsy, some economists argue.

It theoretically makes sense, Michael R. Strain, an economist at the conservative American Enterprise Institute, said of the link between wage increases and inflation, but empirically, its increasingly difficult to find a real strong link.

A study by the Federal Reserve Bank of Cleveland, for example, concluded that the connections among wages, prices, and economic activity are more akin to a tangled web than a straight line, and that the ability of wages to help predict future inflation is limited.

Regardless, there is plenty of evidence that workers have yet to receive their fair share of this most recent expansion or even the previous one.

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This is what I want, as a proud cuck
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Raise the capital gains and dividends tax

*insert clap emojis as necessary*
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But Reagan said making rich people richer would make the rest of us rich!
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I am of the opinion that capitalism and democracy have both failed the people are large. Both systems favor a privileged minority while the majority gets to suck on their thumbs.
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sauceje posted...

I am of the opinion that capitalism and democracy have both failed the people are large. Both systems favor a privileged minority while the majority gets to suck on their thumbs.

You're gonna have to explain the democracy part of this post
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shockthemonkey posted...

Shocking. I thought for sure it would trickle down.

i guess it hasn't. we're all foolish for thinking this way.
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Antifar posted...

sauceje posted...

I am of the opinion that capitalism and democracy have both failed the people are large. Both systems favor a privileged minority while the majority gets to suck on their thumbs.

You're gonna have to explain the democracy part of this post

Gerrymandering, Donald Trump, etc
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HylianFox posted...

Antifar posted...

sauceje posted...

I am of the opinion that capitalism and democracy have both failed the people are large. Both systems favor a privileged minority while the majority gets to suck on their thumbs.

You're gonna have to explain the democracy part of this post

Gerrymandering, Donald Trump, etc

i hate how he ran the show today, he had no damn class. and to top it off he made the queen wait due to his motorcade and broke a few royal etiquette rules.
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But less people are in abject poverty than before and we are better off than starving African children, so shut up! Reaganomics works!
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HylianFox posted...

Antifar posted...

sauceje posted...

I am of the opinion that capitalism and democracy have both failed the people are large. Both systems favor a privileged minority while the majority gets to suck on their thumbs.

You're gonna have to explain the democracy part of this post

Gerrymandering, Donald Trump, etc

America is not truly a Democracy. Especially in terms of presidential election we are a republic in that you are voting for a delegate to vote for president, but in most places that delegate is not required to vote the way they pledged prior to you voting for them. So the presidential election is not Democratic at all.

HylianFox posted...

Antifar posted...

sauceje posted...

I am of the opinion that capitalism and democracy have both failed the people are large. Both systems favor a privileged minority while the majority gets to suck on their thumbs.

You're gonna have to explain the democracy part of this post

Gerrymandering, Donald Trump, etc

But these things are anti-democratic. Trump didn't even get a plurality of the vote. And other countries don't seem to have the gerrymandering issues we have (systems like proportional representation help).
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But, couldn't you make the same argument about how capitalism isn't so bad by looking at some of the same countries you're citing to defend democracy?
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Antifar posted...

You're gonna have to explain the democracy part of this post

The US is not the only democratic country in the world. In Brazil we have basically reduced ourselves to a Hillary vs Trump situation, except the Trump candidate is a glaring homophobe who is not against bringing us back to a militaristic dictatorship like we had back in the 80s.
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kingdrake2 posted...

shockthemonkey posted...

Shocking. I thought for sure it would trickle down.

i guess it hasn't. we're all foolish for thinking this way.

half of us were smart enough to realize it wouldnt.

trump is shit
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