Wages as a percent of the economy are at an all-time low. This is both cause and effect. 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.
Notice that wages have stagnated in the above chart. Simple answer – until the unemployment gets down to a point where corporations have to start competing for employees with better pay and benefits – large corporations are going to set the market price for wages and thusly … no prosperity. Meanwhile – the C suite executives and wealthy shareholders are raking it in. And they’re doing it on the backs of the middle class.
The chart below shows corporate profits. You may notice that regulations and the fear of taxes are not inhibiting business profits. This chart reminds me of this scene HERE. You may also note that conservatives are pushing for further tax breaks for large corporations and espousing the view point that somehow too much government intervention is making it difficult to be profitable. Right.
Charts courtesy of Business Insider
The chart below shows the rate of credit (red) vs. the rate of the economy (blue). We are a credit driven economy. Some could call that a House of Cards.
This chart shows American GDP when you subtract out what we borrow to fuel the economy. WOW.
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