Here Are The Four Charts That Explain What The Protesters Are Angry About…

1. Unemployment is at the highest level since the Great Depression

2. At the same time, corporate profits are at an all-time high, both in absolute dollars and as a share of the economy.

The charts explain what the Wall Street protesters are angry about. They also explain why the protesters’ message is resonating with the country at large.

Corporate Profit After Tax

Image: St. Louis Fed

Corporate Profit As A Percent Of GDP

Image: St. Louis Fed

3. Wages as a percent of the economy are at an all-time low. In other words, corporate profits are at an all-time high, in part, because corporations are paying less of their revenue to employees than they ever have. There are lots of reasons for this, many of which are not the fault of the corporations. (It’s a global economy now, and 2-3 billion new low-cost employees in China, India, et al, have recently entered the global workforce. This is putting pressure on wages the world over.)

Wages As Percent Of GDP

Image: St. Louis Fed

4. Income and wealth inequality in the US economy is near an all-time high: The owners of the country’s assets (capital) are winning, everyone else (labor) is losing.

Three charts illustrate this:

The top earners are capturing a higher share of the national income than they have anytime since the 1920s:

wealth and inequality

CEO pay and corporate profits have skyrocketed in the past 20 years, “production worker” pay has risen 4%.

wealth and inequality

After adjusting for inflation, average earnings haven’t increased in 50 years.

wealth and inequality

It’s worth noting that the US has been in a similar situation before: At the end of the “Roaring ’20s,” just before the start of the Great Depression. (See some of the charts above).

It took the country 15-20 years to pull out of that slump and fix the imbalances. But by the mid-1950s, employment, corporate profits, wages, and inequality had all returned to more normal levels. And the country enjoyed a couple of decades of relatively well-balanced prosperity. But now, everything’s out of whack again.

Importantly, the inequality that has developed in the economy over the past couple of decades is not just a moral issue. It’s a practical one. It is, as sociologists might say, “de-stabilizing.” It leads directly to the sort of social unrest that we’re seeing right now.

About Abdul Rahman Alieh

I use this space to share interesting videos and snippets from articles and books I come across. I hope you find this blog interesting. Can't wait to read your comments! Abdul Rahman

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: