Record Profits and Declining Living Standards, Again
For the second year in a row (and despite the continuation of high unemployment rates), American corporations posted record profits ($1.97 trillion for the 3rd quarter of 2011, according to the Huffington Post). At the same time, pay, benefits and living standards for the majority of Americans declined.
The connection should be obvious. As bosses downsize their businesses, throwing more and more workers into the unemployment lines or compelling them to accept lower wages in exchange for protection from unemployment, those lucky enough to have jobs are being forced to worker harder, faster and longer (productivity increased by 3.2% during the 3rd quarter of 2011). As a result, companies are spending less on labor and getting higher productivity as a result. (At least they were until this most recent quarter, when productivity actually declined by nearly 1%, probably because they have people working so hard and long they are burning out or deliberately slowing down out of exhaustion or frustration).
The AFL-CIO Executive Paywatch list found that average compensation for S&P 500 CEOs was $12.9 million in 2011, a 13.9% increase over 2010, which itself saw a 22.8% increase over 2009. Real wages for workers fell by 2%, according to the Bureau of Labor Statistics. The average CEO took home 380 times more than the average wage of their employees. 30 years ago they only took home 42 times as much as their employees. (See www.news-record.com)