The company has repeatedly fired employees who talk about dangerous working conditions or even suggest that employees need a voice. Smalls had something else to do in his favor, something that brings me to the report on Friday’s great jobs from the Bureau of Labor Statistics. The report shows that the economy continues to roar back to life since the Covid recession. With consumer demand soaring, employers are desperate to hire. This has given American workers more bargaining power than they have had for decades. Wages have risen by 5.6% last year. Is there anything to worry about? Not at all. American workers have not grown much in four decades. Most of the gains in the economy have gone to the top. After all, inflation is so high that even a 5.6% wage increase last year is minimal in terms of real purchasing power. But corporate America believes these wage gains are contributing to inflation. As the New York Times solemnly reported, wage earnings “could drive up prices.” This is pure rubbish. Unfortunately, the chairman of the Federal Reserve Board of Directors, Jerome Powell, believes that. He is concerned that “the labor market is extremely tight” and “at an unhealthy level”. As a result, the Fed is on track to repeatedly raise interest rates in order to slow the economy and reduce the bargaining power of American workers. Stop here to think about it: The Commerce Department said Wednesday that corporate profits are at a 70-year high. You read that right. Since 1952 companies have not done as well as they do now. Although they pay higher costs (including higher wages), they have managed to increase their profits. How? They have enough pricing power to pass on these higher costs to consumers, and even add a little more for themselves. When American companies are overflowing with money like this, why should wage gains boost price increases, according to the Times? In a healthy economy, companies would not pass on higher costs – including higher wages – to their consumers. They would pay higher wages than their profits. But this is not the case. Instead, companies use their record profits to buy back huge amounts of their own shares to keep their stock prices high. The job market is not “unhealthily” tight, as Jerome Powell claims. companies are unhealthily fat. Employees do not have much power. do companies. However, the reality is that corporate America does not want to give any of its record profits to its employees. If it can not fight the unions directly, it will do so indirectly by blaming inflation on wage increases and then cheering on the Fed as it slows down the economy enough to eliminate the new bargaining power of American workers.
