- In the past two quarters, U.S. corporations outside the finance industry posted their fattest margins since 1950, explaining why stock markets keep hitting all-time highs.
- “Workers may be tired of seeing the fruits of their labor go to corporations making record-breaking earnings,” Chris Rhomberg, a professor of sociology at Fordham University, stated.
- Businesses paid their employees 12 percent more in the last quarter from a year earlier, but profits were up 37 percent, so price increases more than covered their increased costs.
Matthew Boesler, Joe Deaux, and Katia Dmitrieva from Bloomberg write:
“In the second year of a pandemic that began by wiping out 20 million jobs, American workers are doing surprisingly well. It’s just that American business is doing even better.
In the past two quarters, U.S. corporations outside of the finance industry posted their fattest margins since 1950 — one reason why stock markets keep hitting all-time highs.
On earnings calls, plenty of executives complained about the squeeze from rising costs of labor as well as materials. But overall, profits were up 37% from a year earlier, according to data out last week from the Commerce Department.
Businesses have been paying out more cash to their employees too, with total compensation up 12% in the last quarter from a year earlier. That’s partly because millions of Americans went back to work — but also because many got a raise when they did so. Hourly earnings broadly kept up with the fast-rising cost of living, and in some low-pay industries like leisure and hospitality they comfortably outpaced it…”
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