An article published today in Australia, based on the national accounts from the Australian Bureau of Statistics (ABS), showed that the process of shifting wealth and income from the poor and middle to the rich is not just continuing but accelerating.
For the second consecutive quarter, and only the second time since 1959, the share of Australia’s income going to employees is below 50%. For the first time ever, the share going to investors is above 31%.
Manufacturers make hay
Manufacturing profits have surged since 2013, the article’s base year, with profits in 2020 more than doubled.
Miners move further ahead
Since 2013, profits from mining have increased in four years and declined in three years, with the increases more than compensating for the declines. Mining profits this year were also more than double 2013 levels.
Other sectors to have experienced profit booms since 2013 include gas, electricity and water, accommodation and food, and administrative and support services.
Sectors to have declined include finance and insurance, transport, rental, real estate and media and communications.
Total profits economy-wide
The critical data, of course, is for the entire economy. The ABS confirmed strong overall profit gains over the last four years. Total profits were 29.4% higher in 2017 than in 2013, 24.6% higher in 2018, a thumping 58.0% higher in 2019 and, despite a correction this year, still an impressive 53.6% higher.
Wages
So what has happened to wages over this period? Have they also risen by 53.6% since 2013? Those who have followed the history of conservative pro-rich Coalition Governments know the answer. Of course not.
Wages have increased at a much shallower rate, nowhere near the rise in profits. Most of this economy-wide rise is due to the expanded workforce rather than wage rises for workers.
Clearly, of all the extra wealth and income generated by workers, entrepreneurs and government activity in Australia, the share going to employees is declining while the share going to investors keeps on expanding.
Incompetence or design?
Is this a deliberate strategy or simple ineptitude?
In answering that, we should note it is within the Government’s power to adjust wage levels. It has significant influence over penalty rates, minimum wage levels and the rate of wage rises. It has direct control over corporate tax rates and collection policy, and could reintroduce a vitally-needed minerals super profits tax.
Contrast with the last international crisis
It did not have to be like this. During the last global recession, Australia had the strongest annual GDP growth in the world. With exports in mining, manufacturing and agriculture booming today, it should have the best again.
Australians are paying dearly for their folly at the last three elections in replacing the Labor Government – which had the world’s best record of economic management – with the Coalition – which now has close to the worst.
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The original article can be accessed here for free at Independent Australia:
https://independentaustralia.net/politics/politics-display/company-profits-soar-and-wages-fall-while-the-media-continues-to-mislead,14593
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“Alan Austin is a great Australian journalist and, I think, a pirate. I steal Alan Austin’s findings all the time.”
~ Jordan Shanks
https://www.youtube.com/watch?v=HtV-2X4BjQI