Chart of the Day: Corporate Profits Under Threat From Skyrocketing Wages

Yesterday in the Wall Street Journal:

Rising wages are beginning to eat into the profits of some U.S. companies. Businesses from dollar stores to hotel operators to fast-food chains have warned in recent months that higher labor costs have been a drag on their profits—a potential headwind for the nine-year stock-market rally as it struggles for momentum ahead of the second-quarter earnings season.

Today in the Wall Street Journal:

Corporate earnings are poised to extend a run of double-digit growth in the second quarter, providing a balm for a stock market that has languished as investors have grappled with threats ranging from fractious trade relations to tightening monetary policy. Analysts expect earnings from S&P 500 companies to grow 20% in the second quarter from the year-earlier period, according to FactSet

And just for the record, here is wage growth over the past few years:

The markers show inflation-adjusted hourly wages in May 2017 and May 2018. As you can see, wages have skyrocketed over the past year. Clearly something must be done about this grave threat to corporate America’s 20 percent profit growth.

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Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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