Posts Tagged ‘corporations’

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As Andrew Flowers reports,

If it seems like big business is getting bigger, it is. Over the last two decades, the largest U.S. companies have grown faster than the economy as a whole. And it’s the biggest of big businesses that are making up a larger and larger share of the growth.

By the same token, perhaps it’s time to start worrying about the downwardly rigid prices of increasingly large corporations (and the upwardly rigid wages they pay to their employees), instead of the downwardly rigid wages that have been so much the focus in recent years.

That Reminds Me

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Walmart-wages

Here’s another chart from the AFL-CIO Executive Pay Watch, which illustrates the fact that, over the long term (between 1962 and 2013), productivity has increased by 388.2 percent while real hourly compensation for workers has risen only 107.4 percent. During the same period, U.S. Walmart stores expanded from zero to 4,625.

The “Walmart model,” which has so enriched the Walton family, has three important dimensions: First, Walmart pays low wages in its own stores. Second, Walmart’s competitive contracting keeps wages low for the workers who produce the goods sold in Walmart stores. And third, the fact that the consumer goods in Walmart stores are sold at relatively low prices means that U.S. employers can pay less, even as productivity has risen, to purchase workers’ ability to work throughout the U.S. economy.

In other words, the enormous growth of Walmart stores has boosted profits not only for Walmart itself (by capturing a large portion of the surplus from the workers who produce the goods that are then sold in Walmart stores by poorly paid Walmart workers), but also the profits of all the corporations across the economy whose workers are forced to have the freedom to sell their ability to work and then use their wages to purchase goods in Walmart stores.

That has kept wages low and profits high—for Walmart and for many other large corporations—since Walmart first burst on the scene four decades ago.

Addendum

And there’s a fourth dimension to the growth of the Walmart model: to the extent that the growth of Walmart stores has come at the expense of other, smaller retailers, the workers who were laid off have been forced to look for jobs elsewhere, thus putting further downward pressure on all workers’ wages—thereby boosting profits of Walmart and of many other corporations.

matt wuerker

graduation-selfie Tremors

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rob rogers nick anderson

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