Worker wages drop while companies spend billions to boost stocks

[McRocket]

'Six months after the Tax Cut and Jobs Act became law, there's still little evidence that the average job holder is feeling the benefit.

Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected.

"Now, economic confidence has been good, we're in a strong economy, GDP is growing, but the question has been, where's the paycheck?" said Katie Bardaro, vice president of data analytics at PayScale.

The answer is, largely, in the companies' coffers. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year, according to research from TrimTabs. Corporations set a record in Q2, announcing $433 billion worth of buybacks — nearly doubling the previous record, which was set in Q1.'

Worker wages drop while companies spend billions to boost stocks


Many (including myself) were POSITIVE this would happen with these tax cuts. Corporations stated over and over again that they were NOT going to put their tax cuts into workers (other then token, one-time bonuses for some PR) or expansion but into things like stock buybacks.

And we were right.

 

[there4eyeM]

How could we imagine that corporations (even though they are run by humans) would do what is best for humans?
It appears that we expect too much.

 

[McRocket]

BTW - I am NOT knocking these corporations for doing this...they are smart to do it. You NEVER look to corporations to help people. You ALWAYS look to corporations to help themselves. And that is free enterprise.
And that is fine with me. Free enterprise runs the economy while the government/charities SHOULD help those who cannot help themselves (unfortunately, the US government does an inadequate job at helping the needy).

Despite all the hoopla, the economy is NOT strong. It averaged well under 3% GDP growth under Obama and is currently only at 2.58% under Trump. That is NOT a strong economy...that is an economy growing at a mediocre rate.

United States GDP Growth Rate | 1947-2018 | Data | Chart | Calendar

If the economy was SO strong, then these companies would be tooling up for expansion...but they are not. But since the Fed has been all-in to the equity markets since the 'Great Recession'; that is the only, dependable place where corporations can count on profits. And with buybacks, they raise their stock prices even more.

The Fed is ruining free enterprise by skewing the economy to too low interest rates and trillions in QE's and bailouts. And the federal government is only helping this pattern continue.
Just yesterday, Trump complained about the Fed raising rates.

Trump criticizes Federal Reserve, breaking long-standing practice


So, corporations are doing great. And who is getting screwed..the little guy/gal (as usual).

And as the OP shows, if the little guy/gal thinks these tax cuts were going to help them? Guess again...you just got suckered.

 

[there4eyeM]

BTW - I am NOT knocking these corporations for doing this...they are smart to do it.

Despite all the hoopla, the economy is NOT strong (it averaged well under 3% GDP growth under Obama and is currently only at 2,58% under Trump. That is NOT a strong economy...that is an economy growing at a mediocre rate.

United States GDP Growth Rate | 1947-2018 | Data | Chart | Calendar

If the economy was SO strong, then these companies would be tooling up for expansion...but they are not. But since the Fed has been all-in to the equity markets since the 'Great Recession', that is the only, dependable place where corporations can count on profits. And with buybacks, they raise their stock prices even more.

The Fed is ruining free enterprise by skewing the economy to too low interest rates and trillions in QE's and bailouts.


So, corporations are doing great. And who is getting screwed..the little guy/gal (as usual).

And as the OP shows, if the little guy/gal thinks these tax cuts were going to help them? Guess again...you just got suckered.

Realistic, perhaps, or clever. Smart may be too much to say.

 

[Toro]

It's a weird thing. The economy is running pretty hot, and employers are complaining about not getting labor, but wages aren't rising much.

 

[McRocket]

BTW - I am NOT knocking these corporations for doing this...they are smart to do it.

Despite all the hoopla, the economy is NOT strong (it averaged well under 3% GDP growth under Obama and is currently only at 2,58% under Trump. That is NOT a strong economy...that is an economy growing at a mediocre rate.

United States GDP Growth Rate | 1947-2018 | Data | Chart | Calendar

If the economy was SO strong, then these companies would be tooling up for expansion...but they are not. But since the Fed has been all-in to the equity markets since the 'Great Recession', that is the only, dependable place where corporations can count on profits. And with buybacks, they raise their stock prices even more.

The Fed is ruining free enterprise by skewing the economy to too low interest rates and trillions in QE's and bailouts.


So, corporations are doing great. And who is getting screwed..the little guy/gal (as usual).

And as the OP shows, if the little guy/gal thinks these tax cuts were going to help them? Guess again...you just got suckered.

Realistic, perhaps, or clever. Smart may be too much to say.

Fair enough.

 

[fncceo]

Boosting stock prices brings more investors into the market, improves the market capitalization of a company allows it to expand and hire more employees.

Just giving money to workers doesn't do anything for workers in the long term.

 

[there4eyeM]

Lincoln:
"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."

 

[Toro]

Boosting stock prices brings more investors into the market, improves the market capitalization of a company allows it to expand and hire more employees.

Just giving money to workers doesn't do anything for workers in the long term.

A company doesn't hire more workers because it uses it's cash flow to buy back stock. It hires more workers because it uses its cash flow to expand its productive capacity.

 

[McRocket]

Boosting stock prices brings more investors into the market, improves the market capitalization of a company allows it to expand and hire more employees.

Just giving money to workers doesn't do anything for workers in the long term.

Wrong.

Companies ONLY hire more workers due to expected increases in demand for their products/services. You don't hire more workers by first putting your money into stock buybacks...that makes no sense.
It is ridiculously obvious - corporations are not confident in the U.S. economy. So instead of putting their money into capital improvements for expansion...they are forced to put it into buybacks.
This has been going on for almost a decade.

Just look at the equity markets...they have been booming since April 2009 (thanks largely to the Fed and corporate buybacks). And yet, the GDP growth of America has remained UNDER 3% since that time.


And forget the 4% U-3; it means NOTHING...Trump himself (rightly) realized that it is a joke.

Donald Trump Calls Unemployment Rate One of the "Biggest Hoaxes in Politics"

A FAR better measure of employment is the employment to population ratio. And it is still WELL BELOW what it was before the 'Great Recession' (higher is good, btw).

Bureau of Labor Statistics Data


The U.S. economy is NOT strong. I said it when Obama was in office and I am saying it now.
It is a house of cards built on cheap debt and corporate bailouts. And not only is it weak...it is leaving the middle/lower classes behind.

 

[Theowl32]

Left wing trust fund losers displaying their fucking pure ignorance.

Again....

Class warfare. Fucking morons.

 

[McRocket]

Left wing trust fund losers displaying their fucking pure ignorance.

Again....

Class warfare. Fucking morons.

Then why don't you post links to unbiased, factual proof that dispels what is being said here that you disagree with?

I STRONGLY doubt that you can.

 

[McRocket]

If Trump REALLY cares about 'hard working Americans'. Than he should offer a tax reduction that ONLY helps them. He should cut income taxes for the middle and lower classes ONLY.
THAT will DIRECTLY help 'hard working Americans'.
Corporate tax cuts WILL NOT.

But he probably won't...because Trump clearly does not give a shit about 'hard working Americans'.

BTW - I agreed with Trump's corporate tax cuts (NOT his other tax cuts though that were aimed at the rich); I think the corporate tax rate should be 0%. But claiming corporate tax cuts ALONE will directly help the working classes is a joke and probably a flat out lie.

 

[fncceo]

Companies ONLY hire more workers due to expected increases in demand for their products/services.

That is only true for workers at the lowest skill levels. Many companies employ more people to expand their business than to deliver their products. Expanding the product line with new products and new technologies or by growing the market penetration of existing products leads to long term growth of a company apart from cyclical demands.

 

[Grumblenuts]

How could we imagine that corporations (even though they are run by humans) would do what is best for humans?
It appears that we expect too much.

We (humans) don't demand enough. Doing what's best for humans is setting the bar too low to begin with.

Just giving money to workers doesn't do anything for workers in the long term.

Up is down, water is dry, yeah, yeah, yeah... Keep on kissing their butts, son. They simply must throw you a bigger scrap now and then as a token of their appreciation...

And that is fine with me. Free enterprise runs the economy while the government/charities SHOULD help those who cannot help themselves

"Free enterprise" is fantasy. Billionaires own and run everything (including me and you). Charities are largely THEIR tax dodging corporations. Governments should regulate corporations, not vice-versa...

 

[McRocket]

Companies ONLY hire more workers due to expected increases in demand for their products/services.

That is only true for workers at the lowest skill levels. Many companies employ more people to expand their business than to deliver their products. Expanding the product line with new products and new technologies or by growing the market penetration of existing products leads to long term growth of a company apart from cyclical demands.

And what does ANY OF THAT have to do with corporate buybacks? Corporate buybacks are an alternative to capital expenditures...not a necessary first step to implementation of them.

American businesses are NOT expanding because they are not confident in the economy and have not been for a decade or so.

But the Fed - with it's QE and ZIRP - has made it extremely attractive for corporations to buyback their own stock. That is because the Fed - who have shown time and again to be macroeconomic ignoramuses - mistakenly believe that if the stock market rises, so will the economy.
And once again, they were proven wrong as the equity markets have boomed since April 2009 while the economy as a whole has grown at a mediocre rate...despite MASSIVE stimulus from the Fed and federal government.

 

[Two Thumbs]

'Six months after the Tax Cut and Jobs Act became law, there's still little evidence that the average job holder is feeling the benefit.

Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected.

"Now, economic confidence has been good, we're in a strong economy, GDP is growing, but the question has been, where's the paycheck?" said Katie Bardaro, vice president of data analytics at PayScale.

The answer is, largely, in the companies' coffers. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year, according to research from TrimTabs. Corporations set a record in Q2, announcing $433 billion worth of buybacks — nearly doubling the previous record, which was set in Q1.'

Worker wages drop while companies spend billions to boost stocks


Many (including myself) were POSITIVE this would happen with these tax cuts. Corporations stated over and over again that they were NOT going to put their tax cuts into workers (other then token, one-time bonuses for some PR) or expansion but into things like stock buybacks.

And we were right.

tax cuts got me a 5% raise, so a 1% loss.....

 

[bripat9643]

'Six months after the Tax Cut and Jobs Act became law, there's still little evidence that the average job holder is feeling the benefit.

Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected.

"Now, economic confidence has been good, we're in a strong economy, GDP is growing, but the question has been, where's the paycheck?" said Katie Bardaro, vice president of data analytics at PayScale.

The answer is, largely, in the companies' coffers. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year, according to research from TrimTabs. Corporations set a record in Q2, announcing $433 billion worth of buybacks — nearly doubling the previous record, which was set in Q1.'

Worker wages drop while companies spend billions to boost stocks


Many (including myself) were POSITIVE this would happen with these tax cuts. Corporations stated over and over again that they were NOT going to put their tax cuts into workers (other then token, one-time bonuses for some PR) or expansion but into things like stock buybacks.

And we were right.

#1 You have to be a profound moron to believe that you can see the efffect of economic policies the quarter they are enacted.

#2 CBS is fake news.

 

[bripat9643]

'Six months after the Tax Cut and Jobs Act became law, there's still little evidence that the average job holder is feeling the benefit.

Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected.

"Now, economic confidence has been good, we're in a strong economy, GDP is growing, but the question has been, where's the paycheck?" said Katie Bardaro, vice president of data analytics at PayScale.

The answer is, largely, in the companies' coffers. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year, according to research from TrimTabs. Corporations set a record in Q2, announcing $433 billion worth of buybacks — nearly doubling the previous record, which was set in Q1.'

Worker wages drop while companies spend billions to boost stocks


Many (including myself) were POSITIVE this would happen with these tax cuts. Corporations stated over and over again that they were NOT going to put their tax cuts into workers (other then token, one-time bonuses for some PR) or expansion but into things like stock buybacks.

And we were right.

tax cuts got me a 5% raise, so a 1% loss.....

Apparently that's all you're worth.

 

[BULLDOG]

Boosting stock prices brings more investors into the market, improves the market capitalization of a company allows it to expand and hire more employees.

Just giving money to workers doesn't do anything for workers in the long term.

Boosting stock prices makes the stock holders richer, but does nothing to help the worker. Trickle down has been tried before, and it has never helped anyone but the rich.