March 5, 2013
Why stocks are up while wages are down (Robert Reich, March 5, 2013, CS Monitor)
Posted by Orrin Judd at March 5, 2013 5:59 PMFirst, productivity gains. Corporations have been investing in technology rather than their workers. They get tax credits and deductions for such investments; they get no such tax benefits for improving the skills of their employees. As a result, corporations can now do more with fewer people on their payrolls. That means higher profits.Second, high unemployment itself. Joblessness all but eliminates the bargaining power of most workers - allowing corporations to keep wages low. Public policies that might otherwise reduce unemployment - a new WPA or CCC to hire the long-term unemployed, major investments in the nation's crumbling infrastructure - have been rejected in favor of austerity economics. This also means higher profits, at least in the short run.Third, globalization.