PBS Newshour - MAKING SEN$E - Dec. 1, 2014

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    Dec 02, 2014 2:43 AM GMT

    "Only Americans who make less than $23,660 a year are eligible for time-and-a-half pay after working 40 hours a week. Today, that’s only 11 percent of salaried workers." Nick Hanauer, venture capitalist

    Does anyone know this to be true? There are non-exempt jobs that pay overtime where the employee makes more than $23.6K

    “Fair overtime standards are to the middle class what the minimum wage is to low-income workers.”

    “We capitalists will tell you that our increasing profits are the result of some complex economic force with the immutability and righteousness of divine law. But the truth is, it is simply a result of a difference in negotiating power. As in, we have it. And you don’t.”

    “And just like raising the minimum wage would nudge up incomes for those workers earning somewhat above it, restoring the overtime threshold would push up incomes for many workers currently earning above $69,000 too.”

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    Dec 02, 2014 2:45 AM GMT
    What Do Executives Do With All Their Money?

    Of course, capitalists like me will tell you that when we cut into profits, the entire economy is damaged. And think of all the investment that corporate profits make possible. What do executives like me do with all that extra money? Why, invest in creating good-paying jobs for middle-class Americans like you, of course.

    Unfortunately, that’s not exactly true either. Mostly, we use profits to manipulate our stock price for personal gain.

    Here’s a little history that will explain how: Back in the 1970s, when the share of total U.S. income that the top 0.1 percent of households got was at a 100-year low, corporate executives received most of their compensation in the form of a salary, just like you. But since the late 1980s, the largest component of income for the top 0.1 percent has been stock-based pay. This shift toward compensation via stock options and grants means that CEOs are directly incentivized to increase the share price of their company’s stock.


    Building better products that lead to higher sales and fatter margins is the traditional way for a CEO to push up the price of his stock. But that’s so old-fashioned. So yesterday. Instead, ever since a former Wall Street CEO in charge of the Securities and Exchange Commission back in 1982 loosened the rules that define stock manipulation (beginning to see a historical pattern here?), U.S. corporations have increasingly resorted to stock buybacks to prop up share prices. According to a report in the Harvard Business Review by professor William Lazonkick—“Profits Without Prosperity”—over the past 10 years, America’s largest companies, those making up the S&P 500, have devoted a staggering 54 percent of their profits to buying back shares, reducing the total number outstanding and thus increasing the value of the remaining shares owned by capitalists like me.
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    Dec 02, 2014 2:46 AM GMT
    But Don’t Rich People Create Jobs?

    Forget everything you’ve been told about how the rich are job creators—that the more money we have, the more we invest, the more jobs we create, and the better the economy is for everybody. As our epidemic of stock buybacks clearly illustrates, capitalists like me already have more money than we know what to do with. Indeed, smart investors are struggling to cope with what Bain & Co. has termed “capital superabundance,” marked by a tripling of global capital since 1990 despite the ongoing stagnation of the underlying economy. Meanwhile, even as this glut of financial capital continues to grow, new technologies are dramatically reducing demand for capital.

    It once cost billions to finance a new steel mill, the symbol of the old economy. But the new economy just isn’t nearly as capital-intensive—in other words, companies don’t need anything like this huge amount of reinvestment in stocks.
  • johndubuque

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    Dec 03, 2014 5:58 AM GMT
    I once worked at a Sears store and there was constant pressure to work off the clock. Wage theft is an issue that has not been adequately addressed in the US.
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    Dec 04, 2014 2:16 AM GMT
    johndubuque saidI once worked at a Sears store and there was constant pressure to work off the clock. Wage theft is an issue that has not been adequately addressed in the US.


    Wow.

    On my commute today, NPR was talking about how corporate profits are so high but wages are stagnant.

    More of this in the United States:

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