How Record Corporate Profits Are Coming Out of Workers' HidesThe Commerce Department reports that corporate profits have never been higher in American history, so why aren't Republicans -- the party of business -- celebrating the news? After all, those profits are coming not from revenue growth -- which would benefit workers and executives -- but from cost cutting. It's that cost cutting that is keeping the unemployment rate at 9.5%, while allowing more of companies' meager revenue growth to flow to the bottom line.

How historic is this accomplishment? The New York Times calculated that at $1.66 trillion, U.S. corporations are on track for annualized profits that are the highest since such records were first kept back in 1950, and notes that the gains in profits are due mostly to rising productivity.

That productivity boost came as workers spent more hours working, and getting paid less to do it. Specifically, between the third quarter of 2009 and the same period on 2010, productivity was up 2.5% as output rose 4.1%, hours worked increased 1.6%, and unit labor costs fell 1.9%, according to the Bureau of Labor Statistics.

The profits of U.S. corporations are growing much faster than their revenues. S&P's Howard Silverblatt estimated that corporate profits in 2010's third quarter would rise 18% from 2009, while sales would be up a mere 5.5%. And The Wall Street Journal reported that "Overseas growth is clearly a driving factor for much of the profit gains."

Big companies are naturally focused on selling their products in overseas markets where demand growth is greater than it is at home. They're also hiring workers in many of those countries, and pushing their U.S. workers to work harder for less money. As long as there are workers outside the U.S. willing to do similar jobs for lower pay, there is nothing to stop this trend from continuing.

Corporations booking record profits at the expense of workers is nothing that Democrats would want to celebrate, but if a Republican was in the White House, the GOP faithful would be crowing about the record-breaking numbers. Since a Democrat is overseeing the economy, though, news of this economic milestone will pass without comment from the wing of the media that wants nothing more than to get one of its own paid commentators into the Oval Office.

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kitty cat

typical democrat bs ----so companies down size and do this and that and pay outrages taxes on top of that ---and you want to blame them for keeping their /cash --that what we risk when we start a business to make money and keep it ??????? just like the company you work for the need to make profit unless you are union and you get bailed out its their money and they pay taxes to be here and have a business--its not the dems money --like michael moore suggets that gm now build what the government approves --WE ARE THE PEOPLE OF THE USA ---GOVERENED BY THE PEOPLE FOR THE PEOPLE i hope more companies leave as per donald trump --- we need a big fat kid in the face and last --why are all politiions RICH!!!!!!!!! they make less than me and they have 10,000 times more money than i do ----huh maybe thats why they spend 40 million to get a job in congress we are so corrupt on both sides --its scary have a great day --i will do the democratic lunch --go to mcdonalds order and tell em they guy behind me is paying its crystal clear how you all think --

November 29 2010 at 5:24 AM Report abuse +1 rate up rate down Reply

Is this a reporter that is not poloticaly biased.I don't think so

November 27 2010 at 8:52 AM Report abuse rate up rate down Reply
1 reply to Buddy's comment

You spell like a republican....

November 27 2010 at 12:24 PM Report abuse -1 rate up rate down Reply

It amazes me that people cannot see that when output of product rises more than the number of hours worked to achieve that and the amount of compensation for that work declines.Then on what planet are we not working more for less.This is stating facts not opinion.Numbers do not lie.Maybe that degree from Glen Beck University doesn't mean to much as you thought it did.

November 26 2010 at 11:21 AM Report abuse +2 rate up rate down Reply

Middle class conservatives, if you are doing nothing but listening to conservative talk and their echo chamber, you are being played and are contributing to your own demise. Wake up and realize which party REALLY speaks FOR you. INVESTIGATE for yourselves!

November 24 2010 at 4:14 PM Report abuse +4 rate up rate down Reply

i was forced into retirement last year. All companies are treating workers like animals, i never saw so much demanded in my 45 yrs of working for so little. Always loved the working lunches, for which we were given subs or pizzia and drinks. In exchange for "OUR" time, the work week already was 6 days/ 10 hour minimum for an annual salary/ no overtime. I have been to the doctor three times now and he always ask what the "hell have you done", all your numbers are good. My answer - I have retired, nothing else. Guess what, No more of those damn working lunches, with that junk food, no more racing out for lunch and only having time to stop at McD or burger king. NOw its a nice lunch sandwich or soup and a lovely dinner with my wife at a reasonable hour. Their profits are based on my flesh - so whats a pound of flesh worth. ps: MY income in retirements 66% of my income, with SS being half of it, wow they always said they take care of us, LOL

November 24 2010 at 11:54 AM Report abuse +2 rate up rate down Reply
1 reply to acpward69's comment

How was it that you became prohibited from shopping your labor to the highest bidder? Or was it that you were allowed to do so, but just incapable of doing so?

November 24 2010 at 12:39 PM Report abuse -2 rate up rate down Reply

Perhaps we could get Mr Cohan enrolled in a 5th grade math class. Then he would understand that if output rose 4.1%, but hours worked only rose 1.6%, while UNIT labor costs only declined 1.9%, the ONLY explanation would be that workers are getting paid MORE, not less. Productivity growth is the font of oveall economc growth, even if it evades simpletons.

November 24 2010 at 11:29 AM Report abuse rate up rate down Reply

This is not good. Anytime laying off Americans makes the CEO richer and the taxpayer poorer (because guess who is gonna have to cover the unemployment) is not good. We need to fix this -- before ALL the jobs are gone. And they are disappearing faster than sugar cookies at Christmastime.

November 23 2010 at 4:55 PM Report abuse +4 rate up rate down Reply
1 reply to ccm989's comment

This has been going on forever and day, you just didn't know because we were so busy thinking spending and spending and thinking that they were doing us a favor when we received raises and better benefit, but yet we never realize that throught all that our health care insurance also increased. But we still thought we had a good deal because they tricked us with the co pay deals and then the separating of dental and vision and the medical. We all thought finally we were getting a break when we were only being used to get more money out of us. We complained for years of people on medicaid and then finally that was fixed to make it harder for the senior or the disable to get medicaid. Of course those with children under eighteen did somehow qualified for it. But for some reason we found it okay to pay for those who didn'thave insurance not because they were denied or kicked off but because they could afford it and felt that it was okay for or price to rise and cover theirs. Seem like we still feel that way, it is better to let they coworker who is making what you are or more free to spend their extra on luxuries while we pay their bills.

November 25 2010 at 6:50 PM Report abuse rate up rate down Reply


November 23 2010 at 4:40 PM Report abuse -5 rate up rate down Reply
1 reply to ebo1d's comment

Take a deep breath and turn off Glen Beck for awhile....

November 27 2010 at 12:22 PM Report abuse rate up rate down Reply