‘When Do Workers Get Their Share?’

Josh Bivens of the Economic Policy Institute asks that question because the latest numbers force him to.

Corporate profits have risen 62.2% since the peak, compared to average growth of 13.9% at the same point in the last eight recoveries that have lasted as long as the current one. This is the fastest rate of profit growth in a recovery since World War II.

Total labor compensation has also turned in a historic performance: growing only 2.8%, the slowest growth in any recovery since World War II and well under the historical average of 9.9%.

Most of this growth in total labor compensation has been accounted for by rising non-wage payments, like health care and pension benefits. Rapidly rising health care costs and pension funding requirements imply that these higher benefit payments are not translating into increased living standards for workers, but are rather just covering the higher costs of health care and pension funding. Growth in total wage and salary income, the primary source of take-home pay for workers, has actually been negative for private-sector workers: -0.6%, versus the 7.2% gain that is the average increase in private wage and salary income at this point in a recovery.

These are ominous signs, suggesting a new march toward greater inequality in the American economy. Worse, the growth in profits combined with a drop in wage and salary incomes suggest that the recovery has a narrow base, with most American consumers only able to increase their purchasing power through debt. Wage growth is not just fair, it is also necessary for a more sustainable recovery. (emphasis mine)

Amen. And check out the chart (click the title). The difference between the Bush recovery and every other recovery is startling. Brad DeLong adds:

It is absolutely remarkable–the fall in the employee compensation share of GDP from 66.5% in late 2000 to 62.7% today. Usually the factor shares are remarkably constant over the business cycle. But now it appears that we are, for once, in an economy behaving according to the sixty year-old theories of Michel Kalecki: high labor market slack as a way of keeping a lid on real wages, and as a tool of class war.

Hey, give them credit for noticing, commenting…and proving what we’ve been saying for awhile now.

Support (?) for Mr Paquette

Charlie of BiteSoundBite posted a response to Mr. Paquette.

An open letter to Mr. Paquette:

No, sir, you are not a villain–I don’t know who you are or what your ideas are but if anyone has made you feel bad about making a little money that is really too bad. Mr. Paquette please do not regret your decision to pursue a high salaried career. I realize that you suffer. This career has asked so much of you. It has dragged you to strange countries (presumably on airlines subsidized and repeatedly bailed out by tax dollars) where you’ve had to communicate via email (a function of the internet whose research and development was paid for by tax dollars).

Do not judge Paquette. This traveling is an enormous sacrifice he is making and all that he is asking for is that his income not be taxed, and that the media stop besmirching his character. And can we really blame him? Imagine his disappointment when after years of college and working in a bicycle factory (good luck finding a bicycle factory in America today) along side other conservatives (because liberals don’t work in bicycle factories?) he had to travel in order to make the kind of salary he desired. What’s more, some people wanted to tax him (didn’t they know he travelled? Hasn’t the man suffered enough?). Now of course none of these taxes were of the sort that allowed him any of the opportunities he had taken advantage of in his life, these were the sort of taxes that went to lazy people content to spend their August evenings at swim parties doing their crack cocaine purchased from food stamps. Oh what Paquette would have given to attend just one of those swanky shindigs, but the bicycles were not going build themselves!

And what kept Paquette going on those hot August nights? What kindled the fire inside his red blooded American heart? The idea that one day, if he worked hard and stayed away from swim parties, he could have a job that paid him an enormous sum of money with no obligation to contribute a damn thing to society except an honest day’s work.

Alas, that was a just dream Paquette. The innocence has long since died. Paquette grew up fast. He did what the company asked him to, he flew to far off strange places where the people walked on their hands and spoke in frenzied gibberish. He stayed in their foreign, upscale hotels, and ate their exotic attempts at steak. He drank their imported scotch and screwed their mid-range whores. And did it make him happy ?(well, happier than the he was at the bicycle factory)–ok for a while it did. But it got old, and one thing remained true to the end…Paquette had to pay taxes. Oh how this burned Paquette. It burned and burned there was only one salve to soothe this burning, it was the salve that had soothed him since he was just a child whose mother bribed him to be quiet on long car trips with candy (he was, after all, traveling) and that salve is known as self pitying and complaining. He spread his self pity and complaints far and wide but it didn’t help. There were still taxes and people who believed that taxes could help give opportunities to people whose circumstances allowed them fewer than most. There were still people who wanted to give some of what they had plenty of so that others could have just enough. I tell you, there is no salve for such an irritant. Paquette I stand with you against this great injustice. You, sir are not a villain, no sir. You sir, are a hero–an example to us all. God be with you on your harrowing stays at the Hyatt. God be with you sir in your consultations with your accountant. You are a hero. You are my hero. You are…PAQUETTE THE MIGHTY!!!!

Feel better?

charlie

(We’re not sure what to make of this. You decide. To read the rest, click the title and scroll down to ‘Paquette the Mighty!’)

(Note to Jamison: You ought to consider activating the permalinks so we can link to specific posts.)

Job Cuts Continue to Rise

Announcements by major U.S. firms climbs for second straight month, employment firm says.
CNN: June 1, 2004: 10:13 AM EDT

NEW YORK (CNN/Money) – The number of job cuts planned by U.S. employers rose for the second straight month in May as firms announced plans to cut more than 73,000 jobs, an outplacement firm said Tuesday.

U.S. businesses announced 73,368 job cuts in May, up from 72,184 job cuts in April, a gain of 1.6 percent, according to Chicago-based Challenger, Gray & Christmas, which keeps track of monthly job-cut announcements.

May’s announcements were 6.9 percent higher than those of May 2003, when 68,623 cuts were announced.

Through the first five months of 2004, employers have announced 408,392 job cuts, an average of 81,678 per month, or about 28 percent lower than the 114,163 pace in the first five months of 2003.

But the 12-month moving average of announcements rose to 89,500 from 89,105 in April, the first gain in the moving average since December.

And the number of job-cut announcements per month remains well above pre-recession levels of about 51,000 per month, CEO John Challenger said in a release.

So we added 700,000 jobs in the last quarter and lost more than 400,000 of them? That’s a grand total of +300,000. At that rate, it will take 10 years to replace the 3,000,000 jobs lost during the Bush’s first three years. Or one Democratic administration. (To read the rest, click the title. Or better yet, click the link below and also get a related article and Melanie’s comments.)

(Thanks to Just a Bump in the Beltway))

Strike Hurt CA Supermarket Chain

From Associated Press
BOISE, Idaho — The Southern California labor dispute that ended in early March contributed to a 79 percent drop in Albertsons Inc.’s first quarter earnings, but the retailer said today its business has been improving since then.

The nation’s second-largest food and drug retailer reported net income of $36 million, or 10 cents per share, on revenues of $8.7 billion for the quarter. That compared to a profit of $172 million, or 47 cents a share, on sales of $8.9 billion a year earlier.

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[T]he impact of the strike during the first quarter was initially anticipated at 32 cents a share, and chairman Larry Johnston credited an aggressive marketing campaign that cost $70 million in incentives and other promotions during the quarter for blunting the effect.