Corporate and Consumer America

Some days we get up and look to better our lives. Other days we get up and look to be told what to do. Corporate America gets paid for telling us; Consumer America has become a victim. One of the biggest issues facing this world today is the growing disparity between the rich and the poor. Highly-profitable corporate America continues to grow on a global pace of 5-10% per year. Middle income consumer America is left at the starting gate. Income levels for the middle class are at the same level as they were back in the 1990’s.

Corporate profits and cash are at all-time highs. Consumer America is looking at average wage and hours-worked numbers that are virtually unchanged for over a decade. Corporate management has the finest Universities in the world to draw intellectual talent from. Consumer America is looking at huge debts, little job growth and limited help.

Corporate America not only has a Federal government that backs them up (because they are “too big to fail”) but picks up the tab for hundreds of billions of subsidies plus high-tech R&D (under the auspices of “Defense”). Bonuses for corporate executives are back in the million dollar range. The average S&P 500 Corporation has not only outsourced labor wherever possible but is now doing over 50% of its business overseas. It continues to blow away its global competition. It has been estimated that middle class America has 5 times more computer power at their fingertips than the average global worker. What ever happened to the “trickle down” effect?

Corporate America and Consumer America should be learning and prospering from each other as well as from what is going on in the other side of the world. All would be well-advised to study broader, longer-time frame global issues. Everybody needs to consider investments in “ideas” rather than “things.” We all need to continue to upgrade our skills for the emerging globalization.

The occupy wallstreet movement is correct in protesting widening economic disparities. But in addition to worrying about others, we should also be looking to improve our personal lives. Saving and investing more money—rather than consuming—is the first step. Although financial studies estimate that the average American spends about 70% its income for essentials (food, clothing, shelter, etc.) that leaves around 30% of our income available for bettering our and our family’s lives. Sadly, Americans are only saving about 5% of their income. No wonder we’re called consumer America.

Technological advances and globalization are permanent features of the 21st century workplace. The higher the skill level, the better the outlook for job and income growth. Maybe we all need to get up in the mornings and think harder core about how we can improve our lives. The Partners Within stands ready to help.

The And Principles—a ‘Partners Within’ blog

Sources: Ameriprise Financial Services, The Economist, Wall Street Journal, Bloomberg, TheStreet.com