Why Does Wall Street Do No Want Workers Doing Well?


Pedestrians walk past a "Now Hiring" sign in the window of a GNC shop
Pedestrians walk past a "Now Hiring" sign in the window of a GNC shop  (Credit: Brian Snyder / Reuters)
The Answer:    When workers gain some leverage, it gets a little harder to generate totally obscene profits
 
It’s always such a shame when the interests of labor don’t match up with the priorities of capital. The Bureau of Labor Statistics reported on Thursday thatnew claims for jobless benefits fell again last week. But in a Wall Street Journalroundup of reactions to the news, one economist found reason for concern.
Deutsche Bank’s Alan Ruskin observed that the rate at which productivity — the amount of goods and services produced per worker — is growing is beginning to slow down in the United States.
We are at the point in the cycle where squeezing any more output from the existing labor force, with the current capital stock, becomes more difficult and attempts to raise output, force an increase in employment or at least employee hours. The good news is that we are closer to the point where a virtuous cycle of increased demand, driving increased employment and income, generating more demand, is in place. The flip side is that the rise in wages relative to output pushes up unit labor costs and undermines productivity, and could chip into the record profit share of income with some negative implications for equities.



        salon.com


    Comments