Showing posts with label profits. Show all posts
Showing posts with label profits. Show all posts

Tuesday, December 11, 2012

Screwing the workers


Just four years after the worst shock to the economy since the Great Recession, U.S. corporate profits are stronger than ever. In the third quarter, corporate earnings were $1.75 trillion, up 18.6% from a year ago, according to last week'si gross domestic product report. That took after-tax profits to their greatest percentage of GDP in history.  How is that possible? It’s simple: profits have surged because wages and other labor benefits are down.

Today’s economy is a market. The 1% populariSe the view that today’s economy is a fair and argue, as Margaret Thatcher put it, There Is No Alternative (TINA). The market's real invisible hands are at work insider dealing and anti-union maneuvering plus outright looting and fraud. What they all seek is power is hire strike-breakers, lobby for special favors and backing politicians pledged to act on behalf of the 1%. Firms use political leverage to make sure that anti-labour laws determine employment and working conditions. Capital-intensive industries out-source low-skill jobs to small-scale providers using non-union labor and advocate privatising public utilities largely aimed at breaking trade union power. 

Why are capitalists uninterested in the jobs crisis? The indifference to the jobs crisis isn’t simply a matter of being out-of-touch. Businesses oppose employment creation policies in order to keep wages low, even though this may limit the market for their own output. After all, without a mass reserve army of labour to decrease the demand for labor and bully the workforce into a more pliant state of submission, profitability becomes imperiled by the threat of enhanced worker power and the ensuing demand for higher wages. This is a process one can clearly see in the wake of the present crisis. Rising financial profits have reduced workers' wages and squeezed profits across the rest of the economy, according to a new TUC report. Worker wages have fallen to historic lows. Such are the true splendors of the “market"

Of course, the role of mass unemployment in suppressing wages and ensuring continued profitability necessarily extends to the global capitalist system as a whole. In 2011 the global reserve army of labour stood at some 2.4 billion people, as opposed to the 1.4 billion found in the active labour market. That is, the global reserve army of labor stood 70 percent larger than the active world labour market. “The existence of an enormous global reserve army of labour forces income deflation on the world’s workers,” Foster and McChesney explained in their book The Endless Crisis. Where labour is on the defensive, capital is on the offensive. Hence, amid rising corporate profits we see a varied global attack on labour—stretching from Brooklyn to Broxburn to Bangladesh and beyond. The class struggle must be international. The international dimension of economic power is the IMF, the World Bank and the ECB through which the U.S. and E.U. imposes imposes austerity on Greece, Spain and the rest of the world, targeting families, the elderly, the sick and the poor, as governments slash benefits. People are being pushed into poverty and no longer can afford the basics such as food, heating and education. The "invisible hand" of the market is unable, or unwilling, to satisfy the needs of society.

 Some political activists call for mobilisation against the bankers and the billionaires but socialists say don’t hate the players, hate the game.

Based on this article

Friday, August 24, 2007

Declining Wages


There is a maxim often espoused by apologists of Capitalism - that a rising tide lifts all boats , meaning that a bountiful capitalism will benefit all sectors of society , not just the capitalist class .


But where is the proof of the pudding.


Profits at British companies are growing at their fastest pace in nearly 13 years while wages of ordinary workers are rising at their slowest pace since 2002, official data showed today.


Office for National Statistics said profits increased by 16.2% in the second quarter of the year compared with a year earlier. That was the best figure since the final quarter of 1994, the profit rise was widespread across different types of company.


Meantime


Wages rose by a meagre 3.6%, the worst pace of growth since the first quarter of 2002.

And inflation - rose to 3.8%, the highest in more than a decade .

So in real terms we are 0.2% worse off


Darren Winder, chief economist at stockbrokers Cazenove said that the cash position and balance sheet of British business was stronger than ever.

"But with household debt now higher than annual GDP, workers may be showing more flexibility over pay rises because they need to keep their job and pay the mortgage."

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