The corporate assault on the living standards of American workers during the pandemic intensified in 2021. As inflation slashed living standards for most, corporate profits hit record highs levels for decades, rising 25% year over year to $2.81 trillion. The increase is even greater – 37% – when taxes are taken into account. This is the highest figure since records began in 1948.
At the same time, according to a report by Compensation Advisory Partners, the compensation of American CEOs increased in 2021 by an average of 19% in the 50 companies surveyed, a record amount. Leading the pack was Discovery CEO David Zaslav, who took in $246.6 million. Amazon CEO Andy Jassy received compensation worth $212.7 million, mostly in the form of stock options.
Other receipts included:
- Apple CEO Tim Cook, who took in $99 million last year
- Intel CEO Pat Gelsinger who received $178.6 million
- Chad Richison, CEO of Paycom Software, who was paid $211,131,206
- Lawrence Culp Jr., CEO of General Electric, who pocketed $73,192,032
- Mike Sievert, CEO of T-Mobile, who received $54,914,015
- Leonard Schleifer, CEO of Regeneron Pharmaceuticals, who took in $135,350,121.
Soaring profits on Wall Street pushed the average employee bonus in New York’s securities industry to a record $257,500 last year, state officials say.
Statistics on corporate profits and executive compensation reveal the glaring profits of big business during the pandemic. Companies were able to raise prices far beyond increases in production costs, dramatically inflating profit margins.
According to a report by a watchdog group, the world’s top 25 oil companies made $237 billion in profits in 2021. Last year, oil giant ExxonMobil posted its biggest profit in seven years, $23 billion. , as rising oil prices added $100 billion to its sales. income. Saudi Aramco, a major oil and gas company owned and operated by the Saudi royal family, reported $110 billion in profits last year, a 124% increase from 2020.
Logistics giant Amazon reported $33.4 billion in after-tax profits in 2021, down from $21.3 in 2020.
Despite COVID and chip shortages, U.S. automakers have seen a surge in profits. Ford reported $17.9 billion in after-tax profits, following a loss in 2020. GM reported $14.3 billion in profits in 2021.
The official inflation rate was 6.7% last year. Inflation accelerated in 2022, with prices rising 7.9% year-on-year in February 2022, eclipsing year-on-year wage gains of 5.1% in February and 5.6% in March.
According to Bloomberg Economics, the average US household will spend $5,200 more this year to buy the same goods and services they bought last year. With commodity prices set to rise further due to the war in Ukraine and US and NATO sanctions against Russia, another attack on living standards is brewing.
Even as real wages are falling in many sectors, Wall Street is expressing concern over the tightness of the labor market, which has allowed workers to push for higher wages. The U.S. jobs report for March, released Friday by the Labor Department, showed the addition of 431,000 jobs, the 11th consecutive month of job gains topping 400,000. Official unemployment fell to 3.6% in March, close to the pre-pandemic 3.5% rate, which was a 50-year high.
In fact, the new jobs figure was below economists’ forecasts and well below the average of 600,000 over the past six months. More threatening for the ruling class are the near-record levels of unfilled jobs and voluntary departures.
In remarks Friday morning after the release of the jobs report, President Biden praised the increase in hiring, citing “record job creation. Record unemployment is falling. Record wage gains. However, the reality is quite different for workers, whose paltry wage gains are being swallowed up by rising prices for gasoline, electricity, food and other basic necessities.
The biggest job gains were for workers in the retail and leisure and hospitality sectors, such as hotels and restaurants. These sectors have always paid starvation wages.
Worker resistance to work for near-starvation wages amid a deadly pandemic and continued supply chain bottlenecks due to worker shortages in key industries such as trucking, place potentially workers in a strong position to fight for meaningful improvements in living standards.
In 2021, strikes took place in a number of key industries as workers sought to tackle rising prices and the impact of decades of wage stagnation. These struggles have mostly taken the form of rebellions against the union bureaucracies which for decades have worked to impose brutal cuts in wages and the destruction of working conditions, in line with their transformation into corporatist appendages of corporations and the capitalist state. .
In a number of contract fights last year, unions agreed to wage increases well below the rate of inflation, including Volvo (averaging 2% per year over 6 years), Nabisco (annual increases of 2 to 2.5%), Kellogg’s (3% one-time increases for “old” workers) and Dana Corporation (as low as 1% per year for the highest pay scales).
In each of these cases, the unions sabotaged workers’ struggles, keeping the strikes isolated and ending them to the point where they threatened to seriously affect corporate profits and inspire solidarity action from other workers in the states. United and overseas. Workers were forced to vote without having had time to properly review the terms of the contract and were often denied the right to see the full text of the contract.
At Volvo and other workplaces, unions only called strikes after workers repeatedly voted by massive margins against sell-out deals brought down by union officials.
In one of the latest acts of betrayal, the steelworkers’ union blocked a strike by 30,000 American oil workers and reached a sell-out deal with wage increases well below the rate of inflation, even as the giants oil companies continued to rip off the public with soaring gas prices. .
In recognition of the vital services of unions in suppressing workers’ wage demands and crushing strikes, the Biden administration has placed the promotion of unions at the center of its anti-labour policy, appointing a “Task Force on ‘Organization and Empowerment’, including National Security Cabinet officials. In a report released in February, the task force made a series of recommendations to encourage the unionization of government contractors, with the aim of “promoting stability” and “minimizing disruption”, i.e. to prevent strikes.
Fearing that low levels of unemployment will encourage workers to fight runaway inflation by demanding big wage hikes, US financial authorities are taking steps to slow the economy by raising interest rates. Remarking that there are 1.8 job openings for every unemployed person, US Federal Reserve Chairman Jerome Powell said: “By many measures, the labor market is extremely tight, significantly tighter that the job market was very strong just before the pandemic,” adding that it was tight at “an unhealthy level.”
After raising rates by 0.25% in March, the Federal Reserve is indicating its support for a more substantial increase of 0.5% in May. The central bank has already said it expects at least six more rate hikes in 2022, the first hikes in three years.
The latest round of rate hikes triggered a precipitous plunge in the stock market, prompting the Federal Reserve to reverse its rate hikes. Since then, markets have become even more inflated as the US Treasury pumps trillions of dollars into Wall Street. The turn to deflationary policies threatens to upset this financial house of cards dramatically.
Growing sections of workers are challenging pro-business unions, including oil refinery workers in Richmond, Calif., who rejected two cut-price contracts pushed by the United Steelworkers union and went on strike for a raise substantial wages and an end to brutal overtime and dangerous working conditions. They are joined by 5,000 striking teachers in Sacramento, California, and tens of thousands of other workers whose contracts are about to expire. It is part of a growing international movement of workers fueled by inflation, inequality and the growing threat of world war.
Reports of rampant profiteering by the financial elite will only further stoke working people’s anger over falling living standards and criminal mismanagement of the pandemic by all sections of the political establishment. The imminent danger of war and demands that workers fund another huge military buildup at the expense of wages and social services will intensify class tensions.
This social anger must be consciously directed against the capitalist system, its political parties, the Democrats and Republicans, as well as the pro-capitalist unions. The way forward requires the building of new, genuinely democratic organizations of struggle – rank-and-file committees in every factory, school and workplace – and a political movement of the working class, with international reach, to end the subordination of forces. profit-seeking productive big business. The working class must assume the direction of economic and social life on the basis of a new higher principle – production for human needs and not profit – that is, socialism.