ICYMI: Corporate Profits Soar, As Cost Increases Erase Wage Gains
July 16, 2018
Key Point: The cost of living is increasing, but paychecks are lagging behind. Meanwhile, corporate profits continue to soar. The result? “Corporate profits have rarely swept up a bigger share of the nation’s wealth, and workers have rarely shared a smaller one.”
New York Times: Paychecks Lag as Profits Soar, and Prices Erode Wage Gains
By Patricia Cohen
Corporate profits have rarely swept up a bigger share of the nation’s wealth, and workers have rarely shared a smaller one.
The lopsided split is especially pronounced given how low the official unemployment rate has sunk. Throughout the recession and much of its aftermath, when many Americans were grateful to receive a paycheck instead of a pink slip, jobs and raises were in short supply. Now, complaints of labor shortages are as common as tweets. For the first time in a long while, workers have some leverage to push for more.
Yet many are far from making up all the lost ground. Hourly earnings have moved forward at a crawl, with higher prices giving workers less buying power than they had last summer. Last-minute scheduling, no-poaching and noncompete clauses, and the use of independent contractors are popular tactics that put workers at a disadvantage. Threats to move operations overseas, where labor is cheaper, continue to loom.