The stock market is at an all-time high. It’s basically back to where it was in 2000. Corporate earnings have doubled since then.
Yet the real median wage is now 8 percent below what it was in 2000, and unemployment remains sky-high.
Why is the stock market doing so well, while most of us are doing so poorly?
• Productivity gains: Corporations have been investing in technology rather than in their workers. They now do more with less people. That means higher profits.
• High unemployment: Joblessness all but eliminates the bargaining power of most workers — allowing corporations to keep wages low.
• Globalization: Big American corporations have been expanding and hiring around the globe. Tax policies and trade policies have encouraged them.
• The Fed’s easy-money policies: They’ve pushed investors into the stock market because bond yields are so low. The yield on a 10-year U.S. Treasury note is now under 2 percent.
All this widens the income gap in America. The rich invest the most and the poor work the most.
Corporate profits are now a larger share of national income than at any time in 60 years, while the portion of total income going to employees is near its lowest in over 50 years. All the economic gains between 2009 and 2011 went to the top 1 percent while the rest of us continue to lose ground.
And yet the tax code continues to benefit the wealthiest among us with lower capital gains tax rates and tax loopholes big enough to drive school buses through.
A healthy economy isn’t measured by the profits of corporations headquartered within it or the value of its stock market. It depends, rather, on how many of people have jobs and whether those jobs pay decent wages.
By this measure, we’re a long way from economic health.
It’s time to change our public policies that have so blatantly helped the most fortunate among us and so cruelly harmed the least fortunate.
Until that happens, there will continue to be disconnect between Wall Street and Main Street.