"Why There's a Bull Market for Stocks and a Bear Market for Workers"

[applegrove]

Why There's a Bull Market for Stocks and a Bear Market for Workers

by Robert Reich at the Huffington Post

http://www.huffingtonpost.com/robert-reich/stock-market-record-high_b_2812590.html?utm_hp_ref=tw

"SNIP................................................


First, productivity gains. Corporations have been investing in technology rather than their workers. They get tax credits and deductions for such investments; they get no such tax benefits for improving the skills of their employees. As a result, corporations can now do more with fewer people on their payrolls. That means higher profits.

Second, high unemployment itself. Joblessness all but eliminates the bargaining power of most workers -- allowing corporations to keep wages low. Public policies that might otherwise reduce unemployment -- a new WPA or CCC to hire the long-term unemployed, major investments in the nation's crumbling infrastructure -- have been rejected in favor of austerity economics. This also means higher profits, at least in the short run.

Third, globalization. Big American-based corporations have been expanding and hiring around the globe where markets are growing fastest -- even while the U.S. market is lackluster. Tax policies and trade policies have encouraged them.

Finally, the Fed's easy-money policies. They've pushed investors into the stock market because bond yields are so low. On Tuesday, the yield on the 10-year U.S. Treasury note was just 1.9 percent.

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