American Workers Are Destroying Corporate Profits

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


For the first time in a while, American workers are truly doing fairly well:

U.S. businesses are facing a problem that many haven’t thought about in years—rising wages. That could be one factor that tips over a market that has the uncomfortable combination of declining earnings and high valuations.

Workers, for the first time since the financial crisis, are demanding raises and actually getting them—or they are walking. The number of workers quitting jobs has increased, a sign they are confident they can get new jobs, and companies are loathe to lose good workers. It now takes 27 days to fill a job, the highest since at least 2001.

….“More revenues are going into the pockets of workers,” said Brian Schaitkin, a senior economist at the Conference Board, a corporate-research organization. “Higher wages are going to place downward pressure on corporate profits.”

Uh oh. Downward pressure on corporate profits. Must be time for the Fed to raise interest rates and put a stop to this nonsense. After all, inflation has skyrocketed recently to…about 1 percent.1 Put that together with actual wage gains for workers and we’re in a heap of trouble. Something must be done quickly.

1Yes, yes, I know the Fed actually uses core PCE as its preferred measure of inflation. But that’s pretty low these days too. And inflationary expectations are also low. Really, inflation just isn’t a big worry at the moment.

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate