The corporate attack on the standard of living of American workers during the pandemic intensified in 2021. While inflation slashed the standard of living for most of the population, corporate profits hit their highest levels in decades, rising 25 percent. % year over year to $2.81 billion. The increase is even higher, 37 percent, 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, US CEO pay increased in 2021 by an average of 19 percent across the 50 companies surveyed, a record amount. Leading the field was Discovery CEO David Zaslav, who received a staggering $246.6 million. Amazon CEO Andy Jassy received a pay package valued at $212.7 million, mostly from stock options.
Other charges included:
- Apple CEO Tim Cook, who made $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 received $135,350,121.
Rising profits on Wall Street pushed the average employee bonus in New York’s securities industry to a record $257,500 last year, according to state officials.
Statistics on corporate profits and executive salaries expose the blatant profiteering of large corporations during the pandemic. Companies have been able to raise prices far beyond increases in production costs, greatly inflating profit margins.
According to a watchdog group report, 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 of oil prices added $100 billion to its sales. Saudi Aramco, a major oil and gas company owned and managed by the Saudi royal family, reported $110 billion in profit last year, a 124 percent increase from 2020.
Logistics giant Amazon reported $33.4 billion in after-tax profit in 2021, up from $21.3 billion in 2020.
Despite COVID and chip shortages, US auto companies enjoyed a surge in profits. Ford posted $17.9 billion in after-tax profit, following a loss in 2020. GM reported $14.3 billion in profit in 2021.
The official inflation rate was 6.7 percent last year. Inflation has accelerated in 2022, with prices rising 7.9% year-on-year in February 2022, dwarfing wage gains year-on-year of 5.1% in February and 5.6% in March.
According to Bloomberg Economics, the average American household will spend $5,200 more this year to buy the same goods and services they bought last year. With commodity prices poised to rise further due to the war in Ukraine and US and NATO sanctions on Russia, a new assault on living standards is in the works.
Although real wages are falling in many sectors, Wall Street is expressing concern about the tight labor market, which has allowed workers to push for higher wages. The US jobs report for March, released Friday by the Labor Department, reported the addition of 431,000 jobs, the 11th straight month of job creation topping 400,000. The official unemployment rate fell to 3.6 percent in March, close to the pre-pandemic rate of 3.5 percent, which was a 50-year record low.
In fact, the number of new jobs was lower than expected by economists, and well below the average of 600,000 for the last six months. Further threats to the ruling class are near-record highs in job vacancies and voluntary resignations.
In comments Friday morning after the jobs report was released, President Biden praised the surge in hiring, citing “record job creation. Record decline in unemployment. Salary earnings record”. However, the reality is quite different for workers, whose paltry wage earnings are being eaten away by rising prices for gasoline, electricity, food and other necessities.
The most significant job gains have been for workers in the retail and leisure and hospitality sectors, such as hotels and restaurants. These sectors have historically paid poverty wages.
Workers’ reluctance to work for wages on the brink of starvation amid a deadly pandemic, and continuing supply chain bottlenecks due to worker shortages in key sectors like trucking, potentially put workers in a strong position to fight for significant improvements in their living conditions. standards
In 2021, strikes took place in several key industries as workers sought to fight rising prices and the impact of decades of wage stagnation. These struggles mostly took the form of rebellions against the union bureaucracies, which for decades have worked to impose brutal wage cuts and the destruction of working conditions, in line with their transformation into corporatist appendages of the corporations and the capitalist state. . .
In a series of contract fights last year, unions settled for wage increases well below the rate of inflation, including Volvo (averaging 2 percent a year over 6 years), Nabisco (2-2.5 percent annual raises), Kellogg’s (one-time 3 percent raise for “legacy” workers), and Dana Corporation (as low as 1 percent a year for the highest pay scales).
In each of these cases, unions sabotaged workers’ struggles, keeping the strikes isolated and shutting them down to the point where they threatened to seriously impact corporate profits and inspire solidarity action from other workers both in the US and abroad. international level. Workers were forced to vote without having 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 called strikes only after workers voted several times by wide margins against settlement agreements put forward by union officials.
In one of the latest acts of treason, the Steelworkers union blocked the strike of 30,000 US oil workers and imposed a treason agreement with wage increases well below the rate of inflation, even as the oil giants continued to rip off to the public with spiraling gasoline prices. .
In recognition of the vital services of unions in suppressing workers’ wage demands and crushing strikes, the Biden administration has made union promotion a central focus of its anti-worker policy, appointing a “Task Force on Organizing and Work of the Workers”. Empowerment,” including national security cabinet officials. In a report issued in February, the task force made a series of recommendations to encourage unionization of government contractors, with the goal of “promoting stability” and “minimizing disruption” — that is, preventing strikes.
Fearing that low levels of unemployment will encourage workers to fight high inflation by demanding significant wage increases, US financial authorities are taking steps to slow the economy by raising interest rates. Commenting on the fact that there are 1.8 job openings for every unemployed worker, US Federal Reserve Chairman Jerome Powell said: “By many measures, the labor market is extremely tight, significantly tighter than the strong job market just before the pandemic,” he added. that it was set to “an unhealthy level.”
After raising rates by 0.25 percent in March, the Federal Reserve indicates support for a more substantial 0.5 percent increase in May. The central bank has already said it plans at least six more rate hikes in 2022, the first increases in three years.
The latest round of rate hikes triggered a precipitous decline in the stock market, prompting the Federal Reserve to rescind its rate hikes. Since then, markets have ballooned further as the US Treasury pumped trillions of dollars into Wall Street. The turn to deflationary policies threatens to upset this financial house of cards dramatically.
More and more sectors of workers are challenging pro-business unions, including oil refinery workers in Richmond, California, who voted against two settlement contracts promoted by the United Steelworkers union and went on strike to secure a pay rise. and an end to brutal overtime and unsafe working conditions. They are joined by 5,000 striking teachers in Sacramento, California and tens of thousands of other workers with looming contract expirations. This is part of a growing international labor movement fueled by inflation, inequality and the growing threat of world war.
Reports of rampant speculation by the financial elite will only further fuel workers’ anger at declining living standards and criminal mismanagement by all sectors of the political establishment of the pandemic. The imminent danger of war and demands that workers finance another large military buildup at the expense of wages and social services will increase 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, international in scope, to end the subordination of the forces productive. in search of profits from large companies. The working class must assume the direction of economic and social life on the basis of a new higher principle: production for human need, not for profit, that is, socialism.