Welcome to the brave new world of post-bailout capitalism. The Commerce Department announced Tuesday that corporate profits are at their highest level in US history, and the Fed released minutes of an early November meeting in which officials predicted a stagnant economy and continued high unemployment.
The lead on the New York Times story read like a line from a Dickens novel: "The nation's workers may be struggling, but American companies just had their best quarter ever." What the Times story neglected to mention is that the bulk of the increase in corporate profits was nabbed by the financial industry rather than manufacturing and other productive sectors. A whopping $33.3 billion out of the total corporate profits increase of $44.4 billion went to the banks and investment houses that those same workers had bailed out with their tax dollars.
Most of us weren't expecting a thank-you card from the financial sector, but even a modicum of humility would be nice.
Now, if companies are doing better than ever...where are the jobs we were assured would start to appear when those companies started doing well?
Much of the rest of the corporate profit, in the non-financial sector, was also taken out of the hides of workers through increased "productivity" growth—meaning they had produced more for less personal income. Case in point: the plant that GM is reopening in Orion Township, Mich., where, under a deal negotiated with the beleaguered UAW union, 40 percent of the workers crawling through cars on the assembly line will be paid fifteen bucks an hour. That's about half the traditional UAW wage.
In other words: these companies have figured out how to get more for less by holding workers hostage. If you want to keep your job, you'll settle for less money. Otherwise, you too, can join the ever burgeoning ranks of the long term unemployed.
cross-posted at MainSt/workingamerica.org