It is not a mystery why jobs are disappear in our economy. To know where they disappear, all we have to do is follow the money. Like all good criminal investigators.
Except in this mystery, the story is told every day in our major media outlets.
Dividends and Stock Buybacks
Stock buybacks and dividend increases for companies in the S&P 500 Index have certainly been on the mend since the end of the financial crisis in 2009. For the first quarter, and on a year over year basis, dividends are 13.7% higher, buybacks are 62.7% higher and buybacks plus dividends are higher by 39.6%. via www.theinvestingstock.com
Corporate Cash Balances
Companies had a record $ 1.91 trillion in cash and other liquid assets at the end of the first quarter, the report also showed, up from $ 1.86 trillion in the prior three months. Six consecutive quarters of profit growth helped fuel a 96 percent jump in the Standard & Poor’s 500 Index from its recession-low in March 2009 through March 2011.via www.dailyforexstock.com
Huge Compensation for CEOs
U.S. workers averaged $46,742 in 2010, up 2.6% from 2009. A June GovernanceMetrics analysis found average compensation among S&P 500 CEOs rose to $12 million in 2010, up 18% from 2009 — and that's not counting the potential multimillion-dollar value of stock or stock options, which are granted at set prices and provide holders profits as stock values rise. via www.usatoday.com
Here's a little math help for the former residential real estate analysts...the average CEO's compensation, not counting the potential multimillion-dollar value of stock or stock options, which are granted at set prices and provide holders profits as stock values rise...of $12 million is roughly 300 times higher than the average salary of those who work at the companies led by these same CEOs.
Back in the day, back before CDOs and swaps, real estate analysts had a rule of thumb. A home's purchase price could not exceed roughly 3 times the total household income of the family applying for a loan to purchase that house. Said another way, a family could not afford a home that was 3 times greater than that total household income for that family.
A fair equivalence of that rule is that companies whose CEOs compensation, not counting the potential multimillion-dollar value of stock or stock options, which are granted at set prices and provide holders profits as stock values rise...is, on average, 300+ times greater than the salary of their employees....is not affordable for that company in the long term.
So, for those looking for and promising a plan for jobs... Look no further. Just follow the money. You see, jobs cost money. Here are three places where the money is. And the rest of the places, the rest of our economy, is where the jobs have disappeared.
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