Why are you broke? page 5 of 5
economy and what's ahead
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If Things Are So Great, Why are you broke? page 5 of 5 |
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The truth about the economy and what's ahead |
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Doug Henwood | |||
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The unwillingness to pay more money is partly due to relentless pressure from stockholders to keep expenses down and profits up. Throughout the 1980s and 1990s, Wall Street has been urging corporate managers to stop wasting money on things like salaries and devote the "liberated" funds to dividends, stock buybacks, and takeovers instead. In fact, you can
explain a lot of the great 16-year bull market through these mechanisms -- the wage squeeze has boosted profits, thereby
boosting stock values and the diversion of funds into shareholders' (rather than workers') pockets. That means Wall Street
has plenty of fresh money to buy stocks with. Ironically, all the middle-class people who've plunged into the stock market,
hoping to grab their share of the action, are really crashing an elite party held in celebration of their own hard times.
It's become fashionable to celebrate the bounty of the Great American Job Machine. But one of the reason we've got more people working longer hours than just about any other country on earth -- not to mention at any time in our own history -- is that there's so little monetary reward for our labor. Instead of being a wondrous mechanism, it looks to me like the whole country is morphing into a sweatshop.
Doug Henwood is editor of Left Business Observer |
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