It used to be that we in North America like to hear about rising profits and business success in our large corporations. Why? Because we hoped that such good news would translate into more jobs and better paying jobs for us—the middle and working classes. Sadly, this is not the reality for 21st Century North Americans. According to The Economist newsmagazine,
Corporate America has bounced back impressively. The quarterly results season that is now nearly over has revealed that profits are back within a whisker of the all-time highs achieved before the downturn in late 2008,” (p. 62, August 7, 2010).
Why are corporate profits back up to 11% of the U.S.A.’s GDP? Well, big business squeezed down costs through a combination of layoffs, wage cuts, reduced hours, and reduced benefits. Many people have discovered that their once full-time work with benefits has been reduced to part-time work or independent contractor status with few benefits. As The Economist noted “US unit labour costs falling at their fastest clip in the post-war era” made those healthy big business profits possible.
Actually, this trend is not new. It really started more than a generation ago and merely reflects a speeding up of the erosion of the standard of life for the North American middle and working classes. Our national wealth is rapidly shifting into the pockets of the richest of the rich. Diane Frances said in her article “In most countries people work harder than in U.S., Canada,”Financial Post, Aug. 17. 2010):
In 1980, the richest 1% in the United States received 9% of its total national income. In 2007… the [top] 1% took home 23% of the income. In the 1970s CEOs made 40 times the average compensation of workers. Now it is 350 times. The top 25 hedge-fund managers (the people who brought you the 2008’s Great Recession) made an average of US$1 Billion and paid 17% income tax, a lower marginal rate than paid by middle-class families.
I still remember the outrage I felt about our economic system some thirty years ago when I was working as a real estate agent in Los Angeles. Back then I was making about $40,000 a year and was paying far more in taxes than some of my clients who were making several millions a year in profits. As Robert Reich, former Secretary of Labour during the Clinton presidency and now a university economics professor, observes,
Bottomline: higher corporate profits no longer lead to higher employment. We’re witnessing a great decoupling of company profits from [North American] jobs ( The Economist, August 7, 2010).
In essence, big corporations have shifted many jobs overseas to much lower wage nations like China while those jobs remaining here are under intense pressure to cut wages/benefits. In his August 28, 2010 commentary in the National Post newspaper entitled “American Apocalypse” Conrad Black notes that while American unemployment is officially listed at about 9.6%, when the chronically underemployed are added into the statistic the real lack of work is around 18% of the U.S. workforce—misery levels approaching those of the 1930s Great Depression.
Nevertheless, the fat cats, the richest of the rich, have successfully manipulated our North American political system to give themselves advantageous tax and securities law treatment. And, of course, the richest of the rich– because they have the power and corporate control–have been rewarding themselves with spectacular pay increases and fantastic bonuses even while they squeeze the pay of their employees in order to keep the gravy train of corporate profits rolling for their own benefit.
Sadly, the avaricious human nature has not changed much over thousands of years. As the Roman Empire became increasingly corrupt, the wealth of the empire became increasingly concentrated into the hands of the wealthy few while the small landowners and free labourers of Italy were increasing squeezed by taxes, cheap imports, and slave labour that undermined their ability to make a decent living. Eventually, the Roman Empire collapsed because few found it in their interest to support it against the “barbarians.” While some aspects of barbarian culture seemed less appealing, like wearing itchy furs, styling one’s hair with rancid butter, and being deeply involved in the weapons culture of the day–on the other hand–the taxes were low to non-existent and one had a shot at dumping debts and getting a new start at life. So area after area of the Roman Empire gradually fell to the control of the freedom-loving “barbarians” moving West—who, of course, were the ancestors of many North Americans. Ironic?
The love of money and social inequity is a serious spiritual challenge to our present society. Jesus of Nazareth warned us to beware of materialism.
Mark 10:23-25 The Message: Looking at his disciples, Jesus said, “Do you have any idea how difficult it is for people who ‘have it all’ to enter God’s kingdom?” The disciples couldn’t believe what they were hearing, but Jesus kept on: “You can’t imagine how difficult. I’d say it’s easier for a camel to go through a needle’s eye than for the rich to get into God’s kingdom.
This is a real challenge for those of us today who believe that life’s “winners” are those who accumulate the most toys. The real winners, however, will be those whom God will call His very own children, giving them eternal life in His everlasting Kingdom. They will have an exciting, abundant life that never ends.