PPJ recently receive this “Economic Justice Note” from Edie Rasell, Minister for Economic Justice for the UCC.
Corporate Profits: Highest Level on Record
Economic Justice Note – April 7, 2014 Corporate profits have hit a new, horrifying milestone. U.S. Department of Commerce data show after-tax corporate profits in 2013 totaled 10% of the entire economy, the highest level since the government began tracking this figure 85 years ago. Of every dollar generated in the economy (and taken home as income), fully $1 in $10 went to after-tax corporate profits. Not even in the late 1920s did after-tax corporate profits devour such a large share of the national economy.
The data also show a horrifying milestone for workers. In 2013 employee compensation (wages, salaries, and the costs of fringe benefits) as a share the economy hit its lowest level in 65 years (since 1948). Of every $10 generated in the economy and taken home as income, just $5.27 went to pay the wages, salaries and fringe benefits of workers.
Read more and see stunning graphs in the New York Times article.
Why are after-tax corporate profits so high and workers’ compensation so low? Because corporate money and power are re-writing our economic policies and laws.
· Corporate taxes are very low. “Corporate lobbyists incessantly claim that our corporate tax rate is too high, and that it’s not ‘competitive’ with the rest of the world … [but] both of these claims are false. … [F]ar too many aren’t paying U.S. taxes at all. Most multinationals are paying lower tax rates here in the United States than they pay on their foreign operations.” See the great work on corporate taxes from Citizens for Tax Justice.
· The Supreme Court favors corporate interests – not just in campaign finance but in many other ways also. “With decision after decision coming down on the side of big business, the Supreme Court under Chief Justice John Roberts has proven itself to be willing and eager to twist the law to favor powerful corporate interests over everyday Americans.” See The Corporate Court by the Alliance for Justice.
· Money in politics influences policy and regulatory decisions. The Center for Responsive Politics (OpenSecrets.org) has extensively investigated the impact of money in politics, the revolving door between lobbying and public service, and the influence purchased with campaign dollars.
· Many state legislators are actively working to support a corporate agenda. The American Legislative Exchange Council brings together state legislators and corporate representatives with money and policy proposals. At ALEC, corporations “have a voice and a vote,” right alongside many of our state legislators. ALEC Exposed names names and alerts the rest of us to what is underway. Also read about the corrosive impact of ALEC’s work, The Legislative Attack on American Wages and Labor Standards, 2011–2012, from the Economic Policy Institute. These measures, and others, have brought employee compensation down to a record low.
· Trade agreements provide a huge opportunity for corporate representatives to write and re-write national and international policies. Trade negotiations happen outside the view of the public, the media, and even Congress. But corporate interests are well represented at the table. The Trans-Pacific Partnership is currently being negotiated between the U.S. and 11 other Pacific-Rim nations. Among the 566 official advisors who are participating in the talks, 480 represent corporations or trade associations. More on the TPP
All the organizations referenced above provide extensive educational resources and suggestions for what to do. Priorities for 2014 include:
1. Raise the minimum wage and support workers in their struggles for unions, higher pay, and better benefits. More
2. Oppose the Trans-Pacific Partnership and the “Fast Track” authority that lets this bill go through Congress with scant debate and oversight. More
3. Oppose reductions in taxes paid by corporations. Any reduction in the corporate tax rate must be more than offset by closing loopholes, ending the use of tax havens, and eliminating the deferral of taxation on foreign earnings. Taxes paid by corporations must rise. More