The Trade Off To Record Corporate Profits: Your Miserable Salary

Tyler Durden's picture


Getting paid miserable wages? Don't fret - just buy the stock of your (hopefully public) employer, and hope and pray that this time is different, and that light at the end of the tunnel is the not the next latest and greatest (and likely last) stock market collapse, in the ultimate trade off of current pay for capital gains: 13 quarters in and Labor Comepnsation is still lower than where it was when the Great Financial Crisis began.

For those curious what the reason for records corporate profits is (or rather was: we have now finally turned the cycle and Y/Y profit growth is, for the first time since 2009, finally negative), the chart below explains it all. It also explains why 401(k) plans are now redundant: anyone who wishes to keep up with the growth rate of their employer has no choice but to buy their stock, and generate returns for all shareholders. Because corporations, people or not, now have all the leverage.

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Tue, 07/17/2012 - 16:48 | 2625825 wandstrasse
wandstrasse's picture

All your work are belong to us.

Tue, 07/17/2012 - 17:00 | 2625883 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

[B]uy the stock of your (hopefully public) employer, and hope and pray that this time is different.

Different from what?  Enron?  Nope.  Aurthor Anderson is doing the books for everyone now.

Tue, 07/17/2012 - 17:09 | 2625924 knukles
knukles's picture

I wanna know what the breakdown is amongst the salary groups....
California Civil Servants... Waythefuckoverpaid.
Bunches and bunches of them drive 500 Mercedes, large Beemers, Jags, etc.
Union bosses
California Civil Servant benefit packages... Oh fuck me, not counted a "salaries", eh?
No fucking wonder.
US Federal Employee salaries, plus the fucking bennies, BECAUSE MOST PRIVATE FOLKS BENNIES ARE DOWN TO NON EXISTENT.
WHo the fuck else is in there that distorts the piss outa the numbers....
Like the total data series is sucko lousy, there are these groups that are included, living like fucking KINGS of Versailles.

Time for that which has been hidden to be shouted from the roof tops.

Tue, 07/17/2012 - 17:16 | 2625952 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Who wants money?!

- POTUS, Baraack Obama, June 2012

Tue, 07/17/2012 - 17:22 | 2625989 MiguelitoRaton
MiguelitoRaton's picture

Obama is the working man's can this be???!!!

Tue, 07/17/2012 - 17:26 | 2626003 knukles
knukles's picture

Like all unionized civil servants, he doesn't work.


Tue, 07/17/2012 - 17:33 | 2626035 francis_sawyer
francis_sawyer's picture

Now THAT'S how you organize a community!

Tue, 07/17/2012 - 17:47 | 2626065 The Alarmist
The Alarmist's picture

Only problem with this information is that the wage-serfs will be the ones prosecuted for insider trading.

Tue, 07/17/2012 - 17:55 | 2626085 Comay Mierda
Comay Mierda's picture

companies are hoarding cash because the investment & regulatory climate in the USSA will significantly deteriorate and they don't know what the new, less free, highly taxed, and more ridiculously regulated economy will look like

want to get big raise? you must be invaluable to your company. irreplacable. you must have a significant and measurable impact on the bottom line.

keep in mind workers today are desperate and dont have much leverage. they have piled on student loans, credit cards, helocs, mortgages and are now debt slaves. and there is a ton of new supply coming out of the colleges and universities with degrees in worthlessness competing for the majority of low skill service jobs available and good innovate talent is hard to find

Tue, 07/17/2012 - 18:46 | 2626099 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Sounds like an NWO only GHWB could dream of.

Tue, 07/17/2012 - 18:02 | 2626111 DoChenRollingBearing
DoChenRollingBearing's picture

Companies are indeed relauctant to invest and hire with the regulatory uncertainty and high taxes.  Companies, especially small ones feel abused, when it is the small and medium sized businesses that are creating jobs.

Job creation is the Number One problem according to Gallup (the polling firm).  Jim Clifton, the CEO of Gallup, has written a verry important new book.  He says that our leaders are digging in the wrong places to encourage job creation.  He wrote a book, very important in my opinion, that describes the way out.  I review Clifton's remarkable book at my blog:

Wed, 07/18/2012 - 00:51 | 2627060 Rentier
Rentier's picture

comay, last paragraph of yours this is true...and most of them only have themselves to blame for putting themselves behind the 8-ball in life.

Tue, 07/17/2012 - 17:56 | 2626089 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Everything up until now has been a beta test.  Stock bubbles, housing bubble, crime sprees by bankers everywhere, it is like living in a Disney movie.  And America is a real life Disneyland, but just like Disneyland, when the shows over, you have to go home.

Tue, 07/17/2012 - 18:02 | 2626105 francis_sawyer
francis_sawyer's picture

In Disneyland... when the 'show' is over, it's actually just getting started... All the pedophiles pass thru the green (illuminati 'OZ') doors of 'Club 33', and instead of raping you, rape your kids...

Tue, 07/17/2012 - 19:04 | 2626283 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The sexualization of Brittney Spears, penises in Little Mermaid, and in every single movie the mother dies.  Yes, Disney is a fucked up part of the American experience that has warped the minds of men, women, and children alike.

Tue, 07/17/2012 - 19:39 | 2626363 francis_sawyer
francis_sawyer's picture

Britney is just the tip of the iceberg in the "MK Ultra" Monarch program (which Disney is a large player in)...


Tue, 07/17/2012 - 22:39 | 2626337 dexter bland
dexter bland's picture

Great chart, only I believe it shows the wages of American workers, not the Chinese workers whose salaries are growing at 15-20%/year.

Unemployment is actually a good thing for the corporations and the markets, it serves to keep wages down and workers in their place. For the loss of a few bottom 20%-er US consumers, billions of new consumers have been created elsewhere in the world. And they will work for a fraction of the wages, while pouring all their savings into western luxury brands - right back into the pockets of our 1%-ers. Even better that those high margin luxury goods can be produced using very little of anyone's labour.

I can see the penny is starting to drop for some. Of course the logical thing to do is to vote for Mitt Romney who understood this long before most of us.

Tue, 07/17/2012 - 19:36 | 2626357 billsykes
billsykes's picture

Longshore workers make 180k yr because of strong unions, don't count them out. Also city landscapers.

Tue, 07/17/2012 - 20:04 | 2626406 mjk0259
mjk0259's picture

Yep, all 2,000 of them. Really significant in population of 300M

Tue, 07/17/2012 - 18:00 | 2626104 Old Poor Richard
Old Poor Richard's picture

All ur tears and sweat are belong to us.


Muh. Thur. Fok.  Corporations, insulate yourselves from any recession.  Lay off half your workers.  Cut the pay of the other half, make them work twice as hard,  and tell them they're the lucky ones.

The corporato-soviets won the cold war.  Will the slaves ever revolt?

Tue, 07/17/2012 - 17:12 | 2625941 Unprepared
Unprepared's picture

This explains the accross the board "Beats bottom-line, misses top-line".


Isn't it a better strategy for the sheeple to invest their ever shrinking savings in their company's biggest competitor? At least they would have a higher probability they would either have a salary or an investment portfolio.

Tue, 07/17/2012 - 17:20 | 2625976 Normalcy Bias
Normalcy Bias's picture

Soylent Green is corporations!

Tue, 07/17/2012 - 16:48 | 2625826 Gringo Viejo
Gringo Viejo's picture

I once applied for a job and the man said I'll pay you what your worth. I told him I couldn't work that cheap.

Tue, 07/17/2012 - 16:49 | 2625834 Tirpitz
Tirpitz's picture

That wasn't a CEO job title you were seeking?

Tue, 07/17/2012 - 17:18 | 2625964 TrainWreck1
TrainWreck1's picture


Tue, 07/17/2012 - 17:51 | 2626075 francis_sawyer
francis_sawyer's picture

Shoulda told him you had experience in organizing communities & smoking up choomwagons... You'd have your own private helicopter by now...

Tue, 07/17/2012 - 16:48 | 2625829 Its_the_economy...
Its_the_economy_stupid's picture

No middleclass to fund the consumer economy.

Tue, 07/17/2012 - 16:49 | 2625833 Getting Old Sucks
Getting Old Sucks's picture

Enron anyone?

Tue, 07/17/2012 - 16:51 | 2625839 partimer1
partimer1's picture

GLOBALIZATION, OUTSOURCING, The labor cost is decreased dramatically, therefore, the profit is soaring.  they took the money and jobs from american people and give them to the top a few executives as huge bonuses.  The tragic part of all is there is no end in sight.  

Tue, 07/17/2012 - 16:56 | 2625861 ebworthen
ebworthen's picture

This is why I don't use self checkout.

They want me to do the work so they don't have to pay a real person; and they aren't even offering me a 10% discount to scan and bag my own purchase.

And no, I don't believe for one instant that the store will "pass the savings" on to me.

Tue, 07/17/2012 - 17:03 | 2625903 adr
adr's picture

Grocery workers union is a bunch of thieves, screw'em. I remember getting my first check when I worked as a grocery packer. After the union dues were taken out I got less than $2.

Tue, 07/17/2012 - 17:21 | 2625985 TrainWreck1
TrainWreck1's picture

I use self-checkout all the time - if they did swabs of the belts at the register they would be declared biohazards.

Shopping carts are worse. That little tray next to the handle? Think diaper poop.

I don't even want to contemplate what lives on the seats of the scooters...


Tue, 07/17/2012 - 17:25 | 2625999 NotApplicable
NotApplicable's picture

One person's biohazards are another's innoclulations.

Tue, 07/17/2012 - 18:59 | 2626270 Meesohaawnee
Meesohaawnee's picture

i REFUSE to use self checkout. All should do the same. Its only there to eliminate people. Why should i inconvenience myself for the profit of some big corp. No fuckin way.

Wed, 07/18/2012 - 11:07 | 2628130 emersonreturn
emersonreturn's picture

stop shopping at mega stores start buying from farmer's markets and small grocers and markets.

Tue, 07/17/2012 - 20:06 | 2626410 mjk0259
mjk0259's picture

So you were making 5 cents an hour? When was this 1320? 

Tue, 07/17/2012 - 17:19 | 2625973 Joe Davola
Joe Davola's picture

The irony is they still have to have someone there to deal with all the problems.

Tue, 07/17/2012 - 16:51 | 2625841 Flakmeister
Flakmeister's picture

It does not take much forensic analysis to see who killed the American middle class...

Next chart should be fraction of corporate profits payed out to officers.....

Tue, 07/17/2012 - 17:09 | 2625928 resurger
resurger's picture

ill print this chart, and give it to my boss tomorrow!

I want a raise or ill fuck you ...

Tue, 07/17/2012 - 17:26 | 2626000 gball
gball's picture you're a direct report to Yahoo's CEO.

Why do you need to print the chart to say that though?

Tue, 07/17/2012 - 17:26 | 2626005 NotApplicable
NotApplicable's picture

Think I can't blow out your CDS spread with a well-placed rumor or two?

Tue, 07/17/2012 - 16:52 | 2625845 ebworthen
ebworthen's picture

The nobility demand that the serfs till the fields and offer up their Daughters for the bedchamber and their Sons for the battlefield.

Tue, 07/17/2012 - 17:12 | 2625940 Alpha Monkey
Alpha Monkey's picture

I (male) was in the military, just like my ma and pa (both), and my ma's pa (who, after service, was a farmer).  Unrelated to my family, I watched this today.  From CNBC.  I think you're on to something.

Tue, 07/17/2012 - 16:55 | 2625846 Shizzmoney
Shizzmoney's picture

I was invited to a seminar about my company's (not matched) 401K today.

I declined, considering that I opted out of the plan (which I was enrolled into w/o my intial permission) and don't even make enough to consider buying company stock.

Just take me to Atlantic City, instead.  If I'm gonna gamble with what little money I make, at least let me have the opportunity to get a free cocktail out of it.

BTW, I somehow don't see this anywhere in the Obama campaign.  I'm sure his masters at AAPL won't like these graphs much.

Tue, 07/17/2012 - 16:59 | 2625877 ParkAveFlasher
Tue, 07/17/2012 - 17:29 | 2626014 NotApplicable
NotApplicable's picture


Tue, 07/17/2012 - 17:09 | 2625919 HardAssets
HardAssets's picture

There's trillions in 401ks/retirement accounts - - so expect that'll they'll grab them eventually. Theyll be 'invested' in 'safe' treasuries, of course.

Tue, 07/17/2012 - 17:59 | 2626102 Henry Hub
Henry Hub's picture

Eventually, but first they want you Social Security and they'll get all of it. Later they'll go for the 401Ks. Happy retirement!

Tue, 07/17/2012 - 19:58 | 2626395 lotsoffun
lotsoffun's picture

yes, they will.  like our social security benefits, that aren't even actually invested in treasurys yet issued, but in future iou's


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