I think we can all agree that 2010 wasn’t the best of years. After all, unemployment at midyear was still bordering on 10 percent, home foreclosures were at a record high, and profits per employee at US corporations only rose 24 percent. Now, go back and read that last one again. As it happens, U.S. corporations were on their way to record profits in 2010, raking in more money at the same time as they were cutting both staff and benefits.
Think that’s a fluke? Profits per employee jumped another 22 percent in 2011. That’s as layoffs reached record heights and 312,000 jobs were eliminated. The year 2011 also marked another record year of profits for U.S. companies. Not only did Fortune 500 corporations pocket a record $824.5 billion, they generated earnings at a rate 23 percent percent higher than the historical average. By the end of that year, Apple alone had $76 billion in the bank, after generating a profit amounting to half a million dollars per employee.
Tell me again that this was a hard year. The economy is bad only in that we've allowed the economy of corporations and the economy of real, living human beings to become totally disconnected.
It’s one thing to say that middle class wages are stagnant while those of the top 1 percent are continuously growing, but there’s a deeper, more fundamental flaw in our current notion of capitalism: Everyone understands that profit is good, but no one seems to understand what profit is for. We’ve constructed a set of standard practices that would not only make Gordon Gekko blush, they’re self-destructive. American capitalism is profiting itself to death.
Few companies are as emblematic of the New American System as is Walmart. The company that in 2011 generated more revenues than any other, the company that is now the largest food retailer in the world is the same company that recently encouraged donations of food to its own employees. It’s also a company that, putting aside any losses generated when it replaces smaller, local stores, causes a net loss to every community it enters in the form of increased tax revenues needed to support the underpaid employees. Walnart not only counts on taxpayer dollars to subsidize its “low cost” stores, it counts on that same taxpayer dollars to drive its business. Walmart employees not only need food stamps to get by, Walmart is the largest place where those food stamps are redeemed. It’s a cycle that grinds employees (and communities) relentlessly down, while driving Walmart revenues just as consistently up.
Of course, it doesn’t have to be that way.
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