“U.S. corporate profits surge to record as worker payouts wilt,” an Aug. 28 Financial Times headline said, pointing to the deepening class divisions under capitalist rule today. Increasing numbers of workers face greater difficulties in making ends meet, while for the capitalist class and its upper middle class hangers-on, things have never been better.
In the second quarter this year profits of U.S. companies hit an astonishing $4.8 trillion per year — 18% of national income — while workers’ share fell to 60%, the lowest since the 1950s.
Profits soared for big tech, oil companies and large banks, among others. This is “getting close to as good as it gets,” JP Morgan Chief Executive Jamie Dimon boasted to the Times. But this is a world apart from the worsening conditions of life and work confronting the working class. The capitalists make huge profits off the superexploitation of working people, and then use these funds to make even more money through speculating on stocks, hedge funds, derivatives and other forms of paper money.
For the second quarter of this year “S&P 500 companies are on track to notch up 47.4 per cent year-on-year earnings,” reports the Times, while workers’ real wages have been declining.
Among workers employed by the same company from 2021 to 2024, more than 40% saw real wages decline by an average of 9%, a recent University of Chicago study said. Many other workers have been forced to take jobs at lower pay and benefits than they previously had been getting.
This decline — and the bite of inflation — have been key issues in recent strikes and lockouts.
Workers’ wages have been stagnant over decades. At the same time, “the decline in labour’s share of income has gained pace in the past five years and especially over the past 12 months,” noted the Financial Times.
The official unemployment rate was 4.1% in July, a slight drop from the previous month despite the fact the Labor Department said 23,000 jobs were “lost” in July.
Workforce drops by over 1 million
But even more stunning is the fact that the size of the workforce declined by over 1 million people over the past year, with the biggest drop being over the last couple of months.
The labor force participation rate is one of the ways the rulers mask the extent of the unemployment figures, by reducing the number of workers considered part of the workforce. It includes those who hold down a job or who the government says have been looking for work over the past four weeks. It’s dropped to 61.4% in July, the lowest since February 2021, during the COVID pandemic. If you exclude the decline in jobs during COVID, the percentage of those who hold jobs is the lowest in 50 years.
Meanwhile, some 1.8 million workers — 25.5% of all those on government unemployment roles in July — have been out of work for at least six months and no longer considered part of the workforce.
More young adults live with parents
The capitalists’ drive to continually expand their profits at workers’ expense impacts working-class households in different ways. Growing numbers of youth who can’t afford today’s high rent and housing costs can’t move out on their own and raise a family.
Some 49% — almost half — of adults aged 18 to 29 live with their parents or other relatives, while another 47% receive help from someone outside their household to pay their living expenses.
The share of young adults still living with their parents has risen by 12 percentage points since 2019. The report notes that 23% of all those who are renting an apartment had fallen behind on the rent at some point in the past year.
Another sign of the deepening social and moral crisis of capitalism is that 26% of adults did without needed medical care because of rising costs. Those covered by workplace insurance “are expected to spend an average $5,297 this year on healthcare,” says the Wall Street Journal. Much of this is for yearly deductibles, copayments and expenses that insurance companies refuse to cover.
Millions of workers this year dropped out of coverage under the Affordable Care Act, known as Obamacare, after subsidies expired and insurance prices skyrocketed. Suzanne Mercer and her husband Kip dropped their plan because they couldn’t afford to pay more than $4,000 a month for coverage. Instead, like many others, they’ve just stopped seeing doctors.
“It’s awful, you just cross your fingers,” she told the Journal after not getting a scan that a doctor ordered after a mammogram turned up a spot. “I just don’t want to know right now, because I can’t do anything about it.”
This is feeding growing moods in the labor movement for action to protect workers from the twin scourges of rising prices and unemployment, conditions that are continually reproduced by the very workings of the capitalist system itself.