Eight-three percent of all workers are ‘non-supervisory’ workers in the Federal Reserve classification of types of workers, yet they have not seen a fair cut of the profits since 2000. Corporations have used financial engineering techniques like stock buybacks where funds are used to buy corporate stock and goose the price up. J.P. Morgan estimates that with dollars repatriated from the tax cut bill, that stock buybacks will hit a new record of $800 billion for 2018. This $800 billion is absolutely wasted on driving stock prices up while not investing in employee wages, capital expenditures, research and development, instead stock buy backs increase executive compensation tied to stock price.
Source; Real Investment Advice – 6/29/18
Since before the Great Recession wages have been stagnant for working class people, the 80 % of the workforce that make corporations prosper. The wages to profits ratio arc shows a continuing decline since the 1980s – interestingly when the GOP was telling us that ‘trickle down’ economics would bring economic prosperity to all. Instead working class families are having to take two or three jobs and borrow on their credit cards just to keep their household finances afloat.
The country is run by Corporate Nation States who make the contributions, fund the campaigns and essentially buy off the legislative influence that counts in the U.S. Each year corporations spend hundreds of millions of dollars in Washington DC lobbying alone, i.e. Amazon has 94 lobbyists keeping DOJ anti-trust lawyers distracted, the FCC at bay on drones and lobby other interests to keep its juggernaut growing.
It is time we wake up to what is happening from Supreme Court decisions that favor American Express over merchants, to the GOP tax cut bill, to relaxing the Dodd-Frank rules on banking Corporate Nation States are running this country. The basic economic trends in America are not going to change unless we have corporate reform. Will this reform come in the form of legislation like Sen. Booker’s Dividend Reform Act or letters from investment banks to corporate CEOs like Blackrock CEO Larry Fink sent recently. We are not sure, but we need to take a path that takes on the dominant power of Corporate Nation States or we are going to see the middle class wiped out and our economy with it. After all, as we pointed out in a recent post on the Common Good, when the working class has little money to spend the rich will lose too. The working class has earned a fair share of the profits. Fair share means when profits go up by 5 % wages go up by at least 5 % otherwise the economy deteriorates like it is today deeply in public and corporate debt.
“in the end the rich will need to see that it is in their interest to build the Common Good, by contributing to our institutions of government and common people or they will lose what they already have and probably a lot more.”