Psst! I want to let you in on a little secret. Have you noticed that when workers get better wages, the media blames them for rising prices? “Wages are running well above what would be
consistent with 2% inflation.” But when corporations rake in record profits, there’s silence. That's because corporate profits aren't tracked nearly
as closely as worker wages. And the reason why comes down to power. Let me explain. Every month, we get measurements of
prices, jobs and wages — These are the three economic variables we hear repeatedly because they're released each month like clockwork. They're viewed as the core criteria
for how the economy is doing, and drive the national
economic conversation. But what's missing from this conversation? Corporate profits. Without a regular
monthly report on profits it's been easy for
much of the media and the economic
establishment to conveniently ignore them — along with the power
that massive corporations wield when it comes to
driving up prices. Now, we do get reports on quarterly earnings from corporations, but those estimates are guesswork at best because corporations often use every accounting gimmick imaginable to hide their true value
and reduce their taxes — like Apple stashing
profits overseas, and Google depreciating
assets like crazy. If we measured corporate profits
more often and more reliably, Americans might start to get the full picture about what's driving inflation
to historic highs. The power of big corporations
to raise their prices higher, then their costs are rising. We could see
profit-price inflation — profits pushing up prices — and not pin the blame on so-called wage-price inflation — workers getting raises. Which, by the way,
have actually been wage cuts when you account for
rising prices. Instead, the corporate media repeat data about jobs, wages and prices — analyzing them and framing
stories around them. They're used by policymakers
at the Federal Reserve, and in Congress and
the White House. The conversation drives
a continuous cycle. “If you look at the jobs report,
you actually see signs of inflation because wages are going up.” “People will stop job hopping
once they start fearing that they won't be able to find a new job to hop to. [Powell] needs companies to lay off their workers, or even go under to cool
down the labor market.” And corporations prefer it this
way, because their role in driving inflation
isn't even considered. They're given cover to exploit
very real supply chain issues — while padding their profit margins. The less up to date and accurate information we have about their profits, the harder it is to respond with policies that will combat their pricing power. Not to mention that they cut major checks for political campaigns, so there's little incentive on behalf of many politicians to change this. The way we try to fix the economy, particularly inflation, is skewed in favor of big corporations and against regular workers because the way we measure the problem disregards the role of corporations. If we had timely and accurate information about corporate profits, rather than assuming by default that the Fed must
hike interest rates to cool the economy by weakening workers’ purchasing power, we would weaken corporations’
pricing power. Through, for example, a windfall profits tax,
selective price controls, and tougher antitrust enforcement. Ultimately, we must build an economy that values workers
at least as much as profits. Doing this starts with
measuring the right things.
