Saturday, July 2, 2011

In America Work No Longer Pays. Meet The Corporate Republican Nanny State

In America Work No Longer Pays. Meet The Corporate Republican Nanny State

After the longest recession since WWII, many Americans are still struggling while S&P 500 corporations are sitting on $800 billion in cash and making massive profits. Now, economists from Northeastern University have released a study that finds our sluggish economic recovery has almost solely benefited corporations. According to the study:

    “Between the second quarter of 2009 and the fourth quarter of 2010, real national income in the U.S. increased by $528 billion. Pre-tax corporate profits by themselves had increased by $464 billion while aggregate real wages and salaries rose by only $7 billion or only .1%. Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. …The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented.”

The New York Times adds, “According to the Bureau of Labor Statistics, average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.”

So as average wages fall, and nearly 14 million people remain unemployed, America’s economic recovery has almost entirely benefited corporations. This development adds another chapter to the decline of the middle class, whose incomes are shrinking and wages are stagnating. Last year, top executives’ salaries increased 27 percent, while workers’ salaries increased only 2 percent. At the moment, income inequality in America is the worst it’s been since the 1920s, as the richest 1 percent make nearly 25 percent of the country’s income.
Since the Corporatist Party or Right-wing Conservative Republican party has been once and for all purged of its moderates, they have become captive of narrow corporate interests and billionaires. So there is little chance of say increasing the taxes on wealthy executives in proportion to their unearned windfall of wealth. That would be the fair thing to do, the American thing to do. It would certainly help the economy to put the money earned by labor back in labor's pocket rather than redistribute it to executives who have never done an honest day's work in their life.

Related - Squeezed Dry: Why Americans Work So Hard but Feel So Poor