November 3, 2011
written by Tom Keller, HR Officer of IPWG
I’ve just read Sophie’s article on the economic crisis , protests against different financial instituations and I wanted to add some background information on the topic.
“Greed is good.”, said Gordon Gekko (played by Michael Douglas) in the 1987 blockbuster ” The Wall Street”. 24 years have passed, but money has never slept, now we can see a lot of protesters on the streets of Manhattan against Wall Street.
But what are these protesters angry about? What are the main reasons?
Here are some self-explanatory charts provided by the FRED® Economic Data, which explain the situation in the US clearly to non-experts also:
“1. Unemployment is at the highest level since the Great Depression (with the exception of a brief blip in the early 1980s).
2. At the same time, corporate profits are at an all-time high, both in absolute dollars and as a share of the economy.
3. Wages as a percent of the economy are at an all-time low. In other words, corporate profits are at an all-time high, in part, because corporations are paying less of their revenue to employees than they ever have. There are lots of reasons for this, many of which are not the fault of the corporations. (It’s a global economy now, and 2-3 billion new low-cost employees in China, India, et al, have recently entered the global workforce. This is putting pressure on wages the world over.)
4. Income and wealth inequality in the US economy is near an all-time high:The owners of the country’s assets (capital) are winning, everyone else (labor) is losing.
Three charts illustrate this:
The top earners are capturing a higher share of the national income than they have anytime since the 1920s:
CEO pay and corporate profits have skyrocketed in the past 20 years, “production worker” pay has risen 4%.
After adjusting for inflation, average earnings haven’t increased in 50 years.”
Author : ipwg