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Common Dreams - March 31, 2022

Federal data released Wednesday shows that U.S. corporate profits jumped 25% to record highs in 2021 even as the coronavirus pandemic wreaked havoc on the nation's economy, disrupting supply chains, hammering low-wage workers, and helping to push inflation to levels not seen in decades.

According to the Commerce Department's Bureau of Economic Analysis (BEA), domestic corporate profits adjusted for inventory valuation and capital consumption reached $2.8 trillion last year, up from $2.2 trillion in 2020—the largest increase since 1976.

Employee compensation also increased in 2021, just not at the pace of corporate profits. Citing the new BEA data, Bloomberg reported that "employee compensation rose 11%, but the so-called labor share of national income—essentially, the portion that's paid out as wages and salaries—fell back to pre-pandemic levels."

"That tends to undermine the argument that soaring labor costs are what's driving the current surge in inflation, a case the Federal Reserve is starting to make as it accelerates interest-rate increases," Bloomberg noted.

Lindsay Owens, executive director at the Groundwork Collaborative, argued in a statement that the new profit figures show that corporate America is successfully weathering inflationary pressures across the economy by pushing higher costs onto consumers—a tactic some CEOs have openly touted during recent calls with investors.

"CEOs can't stop bragging on corporate earnings calls about jacking up prices on consumers to keep their profits soaring—and today's annual profit data shows just how well their inflation strategy is working," Owens said. "These megacorporations are cashing in and getting richer—and consumers are paying the price." ...
Read full report at Common Dreams