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Tuesday, May 11

Corporate Profits Up: not yours

Oh man. So Bush and friends did everything in their power to make sure that companies wouldn't have to pay overtime to employees so companies could make more money. Positions were outsourced to foreign countries so that companies could save money and make more profit. Wage increases are nominal, if anything. The stockmarket isn't doing bad if you're an investor. But if you are an employee of a corporation, you're getting the shaft. And Bush doesn't care. Corporate profits are enormous yet nothing is trickling down to help the economy. Oh yeah, inflation's back too. Boot Bush!

From Bloomberg:
U.S. corporate profits surged 87 percent from the third quarter of 2001 to the end of 2003, according to Commerce Department figures. Wages and salaries grew 4.5 percent. ....After inflation, real wage gains were 1.1 percent...

...Executive pay hasn't been as restrained as that of workers. Salaries of chief executive officers rose 8.7 percent on average in 2003 at 70 companies studied by Bloomberg, while U.S. employees' average pay inched up 1.5 percent. In 1980 CEO pay was 40 times that of the average worker, now it is as much as 400 times to 550 times higher.

...Motorola Inc., Eastman Kodak Co. and Caterpillar Inc. all announced first-quarter profits last month that at least doubled from a year earlier... Like other U.S. corporations, all three have trimmed their payrolls since 2001.

...Wage gains have been curbed by a loss of 1.5 million jobs since January 2001 and productivity gains of more than 4 percent in each of the past two years, the first time that's happened since records were kept in 1947.
So productivity is up and corporations don't need as many employees, profits are up, yet employees pay is virtually the same as it was 2 years ago.

``They basically froze our pay scale,'' Green said. United Auto Workers Union members last month rejected Caterpillar's latest contract proposal to cut wages for new workers.
...
The lack of real gain in wages may hurt President George W. Bush's re-election chances. ``There's a tension between what's good for the stock market and what's good for Bush in the election,'' said Tom Gallagher, a Washington political analyst for International Strategy and Investment Group Inc...

The contrast between stagnant wages and soaring profits "is a good part of the explanation for Bush's negative polling numbers on the economy,'' Gallagher said.
Well there you go. Bush is only interested in corporate gains for their wealthy stockholders. Profits have not trickled down to the actual workers who made the corporation grow. The profits are staying in the corporations. How does that do anything for the economy? It doesn't.
Some companies have begun to cut benefits. Motorola and Deere & Co. have stopped offering health-care coverage for future pensioners. Others, such as DuPont Co. and General Motors Corp., are charging them more.

Some companies including Delphi Corp., the world's largest maker of auto parts, and Visteon Corp., the fourth-largest, plan to cut new workers' wages. Georgia-Pacific Corp., the biggest U.S. plywood maker, reported April 29 a first-quarter profit of $147 million....[union workers are] about to vote on a contract that calls for 2 percent-a-year pay increases in two of the next four years, with cash payments instead of wage boosts in the other two.

Dow Chemical Co., the largest U.S. chemical company, reported April 29 that its profit increased sixfold in the first quarter, to $469 million... wages increased by 4 percent in 2003 after pay boosts of 3 percent in each of the two previous years, some of it absorbed by higher medical insurance costs.
Bye bye middle class.

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