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Most Americans Are Not Sharing In Economic Recovery While Top 1% Of Earners And Big Companies Don’t Know What To Do With Their Money

Most Americans Are Not Sharing In Economic Recovery While Top 1% Of Earners And Big Companies Don’t Know What To Do With Their Money

Big Companies
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The saying that the rich get richer and the poor get poorer seems not truer than today. Many economists are disturbed by the latest trend in which corporate profits are so high shareholders don’t know what to do with their money while a majority of Americans are still struggling financially.

“Companies made a record $1.1 trillion in stock buybacks in 2018 and are on track to surpass that number this year. But they still have record cash holdings of close to $3 trillion,” Business Insider reported. “U.S. companies raked in a record $2.3 trillion in corporate profits last year, while the country’s total wealth increased by $6 trillion to $98.2 trillion (40% of which went to those with wealth over $100,000).”

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As a result, the top 1 percent of earners and big companies have record levels of unused cash.

Of course, there are things that companies could do to make things more equal, such as pay their workers more.

There are various reasons that the economy has changed course. “The Fed’s quantitative easing program pushed the cost of borrowing money to next to nothing for nearly a decade, allowing companies to splurge on debt for mergers and acquisitions and to boost revenue,” Axios reported. “At the same time, globalization allowed them to reduce labor costs, meaning that gains effectively were returned as profit and used by public companies to boost stock prices.”

While a few are benefitting, this is actually bad news for the global economy.

“The end result is money that would previously have been split between businesses, workers and the government for projects like schools, health care and infrastructure is instead sitting in corporate accounts earning little to no return,” Business Insider reported.