It was once the standard that firms that performed well would give all their employees an annual raise, in part to acknowledge workers' contribution to the business's fortunes, in part to ensure that wages kept pace with inflation (otherwise workers would be suffering a real-terms pay-cut every year).
American firms are more profitable than ever, and enjoying never-seen low rates of taxation, but the new profits and retained earnings are being diverted to financial engineering schemes like stock buybacks that enrich shareholders, while workers' wages have suffered from decades of stagnation.
At a conference last week at the Dallas Fed, the corporate leaders onstage declared that the era of across-the-board raises was over, and would never return.
Troy Taylor CEO of the Florida Coke franchise put it succinctly: "It's just not going to happen. [A general raise is] absolutely not in my business."
The moderator asked the panel whether there would be broad-based wage gains again. "It's just not going to happen," Taylor said. The gains would go mostly to technically-skilled employees, he said. As for a general raise? "Absolutely not in my business," he said.John Stephens, chief financial officer at AT&T, said 20% of the company's employees are call-center workers. He said he doesn't need that many. In addition, he added, "I don't need that many guys to install coaxial cables."
Forget about broad-based pay hikes, executives say [Steve Levine/Axios]
More evidence of increasing deflationary pressure on wages [Angry Bear/New Deal Democrat]
(via Naked Capitalism)
