US productivity - Still leading the world

[WATU2]

When I was a kid I used to watch the GE ads that patiently explained how productivity made everyone better off. So even as prices rose, rising wages justified by increased productivity meant that the number of hours someone worked to buy the same products would fall.

The attached article by McKinsey & Co points out that the US still leads the world in productivity and increases in productivity, not Japan or Germany. Yet in the US in real terms, wages have not increased along with productivity. Wages in real terms have fallen slightly over the past decades.

We can offset this reduction in purchasing power by putting women to work, increasing the use of credit, pulling the equity out of our homes, etc. but eventually that runs out (anyone remember 2007?). Ultimately the fix has be to increase the share of productivity that goes to wage earners.

It's hard to imagine any company producing ads with the GE message of the mid 50's.







Productivity and future growth

 

[WATU2]

While corporate after tax profits as a percentage of GDP are breaking historical records, corporate income taxes contribute a smaller and smaller portion of federal revenue. In 1952, the corporate income tax accounted for 33 percent of all
federal tax revenue. Today, despite the record-breaking profits, corporate
taxes bring in less than 9 percent.

Lobbying expenses and campaign contributions are good investments.

This post was edited on 11/4 1:21 PM by WATU2

Federal Revenues see table 2.3 source of income a

 

[lawpoke87]

Good articles.


U.S. corporations actually have a combined statutory tax rate of 39%...one of the highest in the industrial world. However, the effective tax rate they pay is far less do to loopholes, tax credits, etc...basically the treatment they pay for by funneling billions into the coffers of our elected officials. (See my $4 Billion spent on mid-term election rant).

Much like the individual tax code and rate structure if your rich and can afford sophisticated tax planning the wealthy corporations and individuals often pay a lower effective tax rate then the middle class. The system is broken.