Corporations Are Raking In Record Profits, But Workers Aren’t Seeing Much of It

Kevin Drum Writer, Mother Jones

From the Wall Street Journal:

U.S. Companies Post Profit Growth Not Seen in Six Years

America’s largest companies are on pace to post two consecutive quarters of double-digit profit growth for the first time since 2011….Earnings at S&P 500 companies are expected to rise 11% in the second quarter, according to data from Thomson Reuters, following a 15% increase in the first quarter.

That sounds great! So does that mean worker pay has also posted strong growth? Let’s take a look:

I’ve used the employment cost index, which accounts for things like health care and other benefits, not just wages. And since corporate profits were down in 2015-16, I’ve used two-year growth rates, adjusted for inflation, to get a fair reading of longer-term earnings vs. pay.

As you can see, employee compensation growth roughly matched corporate profit growth in 2016, but in the first half of 2017 corporate profits have spiked while wage growth has been meager. Basically, corporations have manufactured profits by being stingy with workers.

I’m certainly happy to see businesses doing well. But I’d be a lot happier if this meant that workers were doing well too.

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Reposted from Mother Jones

Posted In: Allied Approaches

Union Matters

Want A Stronger Economy? Try Collective Bargaining

By Bethany Swanson
USW Intern

Well established collective bargaining systems improve wages, working conditions, and economic equality. They also can protect the economy as a whole against downturns.

These were the findings of a study published last week by the Organization for Economic Co-operation and Development (OECD), an intergovernmental agency founded after WWII, dedicated to improving economic and social conditions for workers across the globe.

Yet collective bargaining systems are facing serious challenges in many OECD countries, which make it unsurprising that the study also revealed that even with the unemployment rate decreasing, wage growth remains lower than it was before the recession in nearly every OECD country.

In the United States, which ranks at the bottom for both collective bargaining and worker security, workers are especially vulnerable.

The OECD found that countries like the United States that have decentralized collective bargaining systems generally have slower job growth and higher unemployment than other advanced nations. It also concluded that low paying jobs can create a slowdown in productivity and a sluggish economy.

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