Sam Ro at Business Insider put some data together and announced that corporate profit margins are getting ever fatter and just officially hit a new high. They have done this on the backs of workers, from whom they have squeezed more and more productivity in order to cut costs.
Profit margins continue to get fatter.
Ever since the financial crisis, corporations have managed to deliver robust profit growth by offsetting the drag of weak sales growth with widening profit margins. These fatter profit margins come from cutting costs, which usually means getting more productivity out of a fewer number of workers.
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And that’s not all. Based on the analysts’ forecasts of S&P 500 companies, those profit margins will average 9.3% for the year and then jump t0 10.0% in 2015.
So, under a Democratic President, corporations are hitting new highs for profit margins.
As this is happening, Republicans in the House are trying to pass unpaid for tax subsidies and credits for business, to the tune of adding hundreds of billions of dollars to the deficit. Yet these same Republicans refuse to raise the minimum wage and to extend long term unemployment, even as the businesses they are catering to are laying off workers and forcing other workers to do the job of the laid off workers.
These same Republicans are against Social Security as it exists and functions right now. They’d rather privatize it by tying it to the “market”, you know, the MARKET. The market that crashed several times under Bush, costing investors their entire portfolio at times. The market is not the same as Social Security, which is there no matter how well or poorly the market performs or the economy is doing. This is, of course, the entire point of calling it “security”.
Over and over, Republicans stick it to the workers of this country while giving handouts to corporations. Corporations made it through the Bush recession by harming workers. Corporations are doing pretty well, but then, they’ve been subsidized by taxpayers in many cases, while the workers of America have not.
Ironically, the workers of America built that new high profit margin on their backs.
It was Mitt Romney’s father, yes the same fellow who was once on welfare, who as chief executive of the American Motors Corporation reduced his own and other executives’ salaries by up to 35%, while taking cost cutting measures.1 As a believer in “competitive cooperative consumerism”, Wikipedia notes he was against the “twin evils” of big business and big labor. The stock options soared from $7 to $90 a share. George Romney was a man who took leadership seriously and knew that it was not sustainable to be a greedy pig on either side of the trough.
Meanwhile, Republicans keep accusing this president of being a “Marxist” “Socialist” hell bent on killing capitalism. The evidence is in: President Barack Obama is really bad at being a Marxist and a Socialist. To be fair, the President has been pushing good jobs for his entire presidency, but the Republican House has refused to even pass his jobs bill. Thus, Obama has resorted to working with governors and states and businesses in order to compel them to raise the minimum wage and get Americans trained for better jobs. He can’t do it alone, though.
The workers of America deserve better than they are getting from this current Congress.
Image: Pete Shaw
1. Mahoney, The Story of George Romney, pp. 190-191.
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