Corporate profits increased by 6.6 percent in 2022, after rising 22.6 percent the year before, but wages, going up in two years by more than double the 15 percent median wage increase for workers in the bottom 90 percent of the labor force in the United States since 1990, according to the Bureau of Labor Statistics.
At Amazon, the CEO-to-worker pay ratio reached 6,474 to 1, with company president Andrew R. Jassy making $212.7 million in total compensation while the median worker received $32,855.
According to the last As You Sow report, the median CEO pay at S&P 500 companies was $18.3 million in 2022, up 17% from the previous year. This is 324 times the median pay of workers at those same companies.
Meanwhile, corporate profits have reached record highs in recent years. In 2022, corporate profits after tax were $2.8 trillion, up 25% from 2020.
These trends are leading to a growing sense of inequality among workers, who are seeing their wages stagnate while corporate profits and CEO compensation soar, but progressive Democratic activist Lisa McCormick says it is not appropriate to call what has been going on for four decades a ‘class war; because until very recently, only one side was fighting.
“I described this as a slaughter, because saying ‘class war’ might suggest someone was fighting back,” said McCormick, an advocate for higher taxes on wealth and passive income, a champion for Medicare for All, and a veteran of the Occupy movement. “The smartest people on the planet tell us it’s ’90 seconds to midnight’ but our political system is broken. Americans must rise to the responsibility of citizenship!”
McCormick said this is why we are seeing more and more labor actions, such as strikes and protests, by workers demanding better pay and working conditions.
“We were protesting austerity cuts, bank bailouts and falling wages twelve years ago when it seemed like nobody was listening,” said McCormick. “It looks like working people have finally become aware that they are being robbed.”
The actions of the UAW, New Jersey nurses, and screenwriters should be viewed in the context of a growing trend of workers demanding better wages and working conditions in the face of rising corporate greed as represented by the apparent disparity between profits and CEO compensation versus what workers get in exchange for their labor.
Nurses at Robert Wood Johnson University Hospital walked off the job six weeks ago in a labor dispute over their demands for pay raises, a freeze on insurance premiums, and mandatory staffing minimums that would require the hospital to schedule one nurse for every one to five patients, depending on the patient’s need.
The UAW rejected all of the automaker’s counteroffers and demanded a 36% pay raise from General Motors, Ford, and Stellantis, before launching the first simultaneous strike against the three Detroit manufacturers.
Another ongoing strike action began on May 2, 2023, when the Writers Guild of America (WGA)—representing 11,500 workers—went on strike over an ongoing labor dispute with the Alliance of Motion Picture and Television Producers (AMPTP), the trade association responsible for negotiating virtually all industry-wide guild and union contracts.
The AMPTP represents the major Hollywood studios, including Walt Disney Studios, Warner Bros., Universal Pictures, Paramount Pictures, and Sony Pictures Entertainment. These studios produce and distribute the vast majority of films and television shows that are released in the United States and around the world.
According to a report by the Motion Picture Association of America (MPAA), the global film and television industry generated $130 billion in revenue in 2022, up from $108 billion in 2021.
The AMPTP’s constituents also generate revenue from streaming subscriptions, home video sales, and licensing agreements, so the producers’ profits were even higher than the revenue reported by the MPAA.
These actions are a sign that workers are fed up with the status quo and are demanding better wages and working conditions.
It is important to note that the labor actions of the UAW, New Jersey nurses, and screenwriters are all about more than just pay. These workers are also fighting for better working conditions, such as safer workplaces and more flexible schedules.
Unions have traditionally been a powerful force for wage growth but the percentage of workers who are members of labor organizations has declined significantly in recent decades.
Globalization has made it easier for businesses to move jobs to countries with lower wages, putting downward pressure on wages in the United States.
The shift to a gig economy has led to an increase in the number of workers who are self-employed or who work on a temporary or contract basis, and often have lower wages and fewer benefits than full-time employees.
The median wage for all workers in the United States has increased by 34% since 1990, according to the Bureau of Labor Statistics, this rise has been unevenly distributed, with some workers seeing much larger earnings increases than others.
For example, the median wage for workers in the top 1% has increased by 138% since 1990, while the median wage for workers in the bottom 90% has only increased by 15%.
This gap between the rich and the poor has widened significantly over the past three decades.