Corporate Profits at All-Time High; Wages at All-Time Low: Can We Call it Class War Yet?
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This week, David Segal at the New York Times broke the news to America that not only was Apple -- the computer and gadget manufacturer formerly seen as a symbol of good old American ingenuity -- making its profits on the backs of abused factory workers in China, but also on poorly paid store employees here in the US.
Apple store workers, he wrote, make up a large majority of Apple's US workforce—30,000 out of 43,000 employees in this country—and they make about $25,000 a year, or about $12 an hour.
Lawrence Mishel at the Economic Policy Institute notes that that's just a dollar above the federal poverty level. This for a company that paid nine of its top executives a total of $441 million in 2011.
“The discrepancy between Apple’s profits/executive pay and its compensation to its workers is a particularly glaring example of what is occurring in the wider economy,” Mishel writes.
And he's right. Also this week, Henry Blodget at Business Insider posted three charts that show just how out of whack our economic system really is. Corporate profits are now at an all-time high, while wages as a percent of the economy are at an all-time low, and fewer Americans are employed than at any time in the previous three decades.
Companies like Apple are squeezing their workers, leaving them to live on less, while lavishing pay and benefits on their executives. The death of lionized Apple chief Steve Jobs seems to have opened a floodgate of reporting and criticism of the company's labor practices, but all this really proves is that Jobs and his empire are no better than, and no different from the rest of the US business elite. Just like everyone else, they're taking their profits directly out of workers' pockets.
“One reason companies are so profitable is that they're 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' are other companies' revenue,” Blodget points out. And high unemployment makes workers willing to accept those poverty wages. When you're desperate for a job, any job is better than nothing.
Right-wingers from Michele Bachmann to Ron Paul have used high unemployment as an opportunity to call for eliminating the minimum wage entirely, letting companies decide just how little they think their workers are worth. Companies love to claim that if they're forced to pay more, they'll have to eliminate jobs, but these numbers show that actually, they're able to keep wages low and refuse to hire; available cheap labor supposedly leads to more job creation, but it's the hollow, gnawing fear created by ongoing high unemployment that keeps wages low and workers passive. And the rich are getting ever richer.
The “recession” is over— officially it ended in 2009, but for most people the pain was just beginning. Real incomes have continued to fall, governments continue to slash budgets while corporate profits just keep going up. This is the new normal.
And it's only going to get worse.
The rhetoric of austerity, sounded loudest from Republicans but often echoed by far too many Democrats, is a language of belt-tightening, of shared sacrifice, of somber speeches by pompous politicians who proclaim that they feel your pain while announcing budget cuts that freeze salaries, lay off workers and force more work onto those who remain. And CEOs use that same language when sorrowfully explaining why they simply can't create jobs. Morgan Stanley's CEO, James Gorman, beset by New Yorkers at his bank's shareholder meeting, blamed the lousy economy when asked why he hadn't created the jobs his company had promised the city in exchange for massive tax breaks.