If you're looking for answers as to what has gone wrong in the U.S. economy--why so many people are unemployed, why so many Americans barely make enough to live on, why "the 1%" just keeps getting richer--here are two charts for you.


Corporate Profit MarginsBusiness Insider, St. Louis Fed


Wages To GDPBusiness Insider, St. Louis Fed

What's wrong with this picture?

What's wrong is that an obsession with a very narrow view of "shareholder value" has led companies to put "maximizing current earnings growth" ahead of another critical priority in a healthy economy:

  • The happiness and well-being of employees.

What those who obsess exclusively about profits forget is that one company's wages (costs) are other companies' revenues.


But, instead, U.S. companies have become obsessed with generating near-term profits at the expense of paying their employees more, making capital investments, and investing in future growth.

This may help make their shareholders temporarily richer.

But it doesn't make the economy healthier.




So, with American companies earning record-high profits and paying record-low wages--and the economy continuing to sputter--we might want to rethink our priorities.
