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So just off the bat reading the title, I was expecting numeric evidence for a very numerically based claim. The data the article provides does not support the
by bsamuels 13y ago
So just off the bat reading the title, I was expecting numeric evidence for a very numerically based claim.
The data the article provides does not support the author's claim, to say it nicely. For one to claim there's an association between wages dropping and corporate profit increasing, you'd need an area graph over time of corporate expenditures with with worker wages and other common expenses listed. Neither of the graphs included support his claim, as there's a multitude of other variables that could explain their trends.
The second claim the author makes is that this is occurring specifically for US companies. There is no data at all cited for this claim.
I wish people would at least "try" when publishing articles with a political motive. All this article will do is reinforce the belief that wages need to rise for people who already believe it.
- GolfyMcG 13y agoThis is too logical for the internet. Someone might draw an objective insight from what you're suggesting.
- zurn 13y agoLooks like it's just summarizing what the Chief Economist at Goldman Sachs thinks. There is lots of other reporting about it on the news. Do you have a theory on what political motive GS might be pushing? Promoting worker wages with made up arguments and unfairly criticising corporate profits doesn't seem to fit their agenda.
- afterburner 13y agoIf they're long term enough thinkers, maybe they realize this trend doesn't have a happy ending.
- venomsnake 13y agoThey had a Ford moment? Final realization that if there is no one to buy stuff the whole financial industry is doomed? Got scared of 6th year of depression?
- VLM 13y agoWhat is the macroeconomic effect of workers 401K stock investment plans? Stock transactions. You get to skim a little off the top both at purchase and sale. Back in the old days when more people were working, on average having higher income, they'd skim more commissions. There is an interesting secondary effect of small retail players having been net purchasers of stock via retirement plans, which is to push the market up. You can rely on the fed lowering interest rates to push the market up until rates hit zero, you know, like now, then that stops. Hmm what happens to stock prices when more baby boomers are selling than millennials are buying... Maybe their only hope is to get as many people contributing to retirement funds as possible to at least reduce the blow. Stocks are fundamentally kinda like real estate in that sellers can stamp their feet and pout and demand whatever rate of return they like, but in the long run, the median sales price is going to be whatever the median dude can afford, and "the market" doesn't care what the sellers "need" it only cares what the buyers median income is, which has been falling for a couple decades depending on who cooks your numbers. In the long run, not just next quarter, GS badly needs a lot more workers contributing to 401K and other retirement options. Maybe they're too heavily leveraged up to survive not having more workers to transactionally skim off of.
- yummyfajitas 13y agoHere is the graph you want. Took me about 3 minutes on the federal reserve site. http://research.stlouisfed.org/fredgraph.png?g=rnM http://research.stlouisfed.org/fredgraph.png?g=rnM
- robzyb 13y agoThe title is "Why are US corporate profits so high? Because wages are so low". Nothing in that graph supports that title. In that graph wages look "about right", whereas profits look... weird. High, but also very weird. There's certainly no causal link in that graph!
- nandemo 13y agoPresumably fajitas didn't mean that the graph proves the article's claim is true; just that the graph is close to what root comment asked for. Indeed it's evidence that the article's assertion is false.