More Evidence against the 1%

I'd like some more creative excuses for this one.

Corporate profits as a % of GDP vs. wages as a % of GDP

 

So corporate profits are going up as a percentage of GDP while Wages and Accruals are going down as a percentage of GDP.

So?

 

Can you explain to us how that is a good thing?

 

It's not a good thing or a bad thing. It just is. Currently GDP is increasing at an annualised rate (2.5%) faster than the compensation of employees (2.1%). All the chart shows is that the economy is growing faster than wages. It doesn't suggest that wages aren't growing. At least in real terms anyway.



Also, much of the 'record corporate profits' aren't exactly as big as everyone makes it out to be. Sure, corporations are making more money than ever before, but 85% of S&P 500 companies miss their earnings guidance, despite having to revise their guidance lower. Also the Top 50 of the largest companies in America have more debt than cash (not including banks, because cash on a banks balance sheet is considered a liability, not an asset).

 

This chart shows wages haven't been growing for the last 30 years; https://www.google.com/search?q=the...http%3A%2F%2Ftwicsy.com%2Fi%2FwLk2te;1018;572 So much for wages.

 

How about....so what? Why should I care? The fact that corps are making more money doesn't affect me at all so....what's the problem?

 

I guess I completely glossed over that. I was too busy noticing the SKYROCKETING corporate profits at the exact same years as falling wages.

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So you don't see the inverse relationship, which occurs exactly at the enactment of the Bush Tax Cuts?

 

No, actually it has been growing. It's index, which means the growth is relative to a base year. Usually 1980, as people love to show that wages hasn't grown since the Reagan Administration, but measuring inflation and wage growth is about as much as an art as it is a science.

See, Index base year 1980 shows wages hasn't kept up with productivity since 1980.



Now, index base year 1992, shows that wages hasn't kept up with productivity since 1992.



It's really all about how you present these images to people, but wages have been rising. Especially if you use an index year of 1980, wages have risen 90% since 1980.

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Negative growth indicates fallen wages, which hasn't happened since 2009.

It really helps if you learn how the read the charts you are googling.

 

The less people make in wages the worse off the economy gets. We need consumption.

If the spending power of a day's work continues to fall as it has for decades, then poverty, unemployment and social unrest will increase.. Eventually, there won't be any more blood to get from the stone.

 

I know exactly how to read the charts. Wages are falling as a % of GDP, profits are soaring as % of GDP. Wages don't fall.. they merely have been (barely) indexing inflation, which has been lower than growth (inflation is well under 2% since 200. That is exactly what the chart shows. All the growth in the economy is going to the 1%.

 

There aren't less people in the economy making wages at all. Nonfarm payrolls are as high as they ever been. Most of the shortfall in GDP has been in the form of investment, not consumption.

Also, I don't understand why people choose to compare wages and profits relative to GDP, which is very overinflated. Especially since the BEA decided to change the methodology and count intangibles as investment spending.

 

In 1980 the minimum wage was $3.10 cents an hour. Today, 34 years later, it is $7.25 an hour. I know some of these folks may not be mathematical geniuses, but I'd lay odds 90% of them could figure out, that the difference in those two wages isn't a 90% increase.

 

You're right. I don't use GDP for much of anything, nor the Nasdaq etc... The best measure in my opinion is the spending power of the day's work. That's not the same as number of people making wages.. But how much spending power the public actually has. Lots of people are on part-time wages, while lots live paycheck to paycheck, and lots are impoverished, and these just rise

In fact, the poverty rate is probably the best measure of how we're doing. Since more per capita must rely on table scraps from the government to survive, does that not clearly show that the system as it is is failing us?

 

The minimum wage is an arbitrary floor. Prices in an economy increase and decrease all the time. I don't see why it makes sense to compare a variable which changes all the time to something like the minimum wage, which does not.

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Yes, but it is encouraged that people continue to use these scraps until the economy can fuel its consumption capabilities.

 

Try living off that up and down price change making minimum wage and get back with me. You'll find out real quick how much sense it makes.

 

More money for corps =/= less money for you.

They are not taking more money from the rest of us, they are simply making more proportionally. Everyone else is still making the same relative amount as were were before, while the 1% at the top has found ways to break away and make even more money.

And cutting your taxes doesn't hurt either.

Again - this doesn't really hurt anybody. There is no one getting hurt by this, everyone else just assumes it must be because the rest of the population looks comparatively worse off than the small group at the top.

 

Very few people make the minimum wage, so why is that even considered a valid argument. You measure the value of income on wages as a whole, not just based on an arbitrary price floor.

The fact of the matter is that wages increase at a steady rate every month, while prices are constantly changing. Everyone's wages are not changing, but most people are experiencing some change in their income. At least enough to have an economic effect or change to the Personal Income statistics.

 

Capitalist profit comes from the consumer/producer, so yes, they are.

 

That break away plan you talk about they found, comes in the form of tax cuts we pay for, where by those tax cuts can roll over into an overseas account tax free drawing interest making more for the well off, while the rest of us do not stay the same, making our dollars buy less. That is the reality on the ground. And it has gotten worse.

 

They're not taking money. We are giving it to them.

Last time I check, you are not legally obligated to support businesses or corporations.

 

They have control of product sales. The common consumer does not have time to be choosy.

 

If that were true, then we wouldn't have so many choices in the market place.

 

They cater to a minority, as many things do.

 

Is that why unpopular products become discontinued after a while?

 

No, that is unrelated.