Shares Of Misery, Miserly

Of the 500 companies on the Standard And Poor’s 500 Stock Index,  most pay a dividend, a cash payment to owners of stock.  Dividends amounted to over 200 billion dollars last year, money paid out simply for owning stock, which is a form of lending to the company.  So these companies are expected to grow their market share, compensate their workers fairly; invest in the plant and equipment, training, technology; AND pay a cash dividend to those people who have lent the company money.  The whole idea of buying stock in a company was based on the belief that the stock would grow in value, returning a profit on the investment at the time of the stock being sold.

Sometime after World War Two, American companies were making so much money that they could not spend it all, it seemed.  So, rather than paying bonuses to the workers who had been creating all of this wealth, the companies decided to award the shareholders with a cash, one time payment.  This process was repeated and repeated, and spread to other companies, until living on dividends became a way of life for many people.  Companies will pay dividends even when they have lost money, out of fear that people will not want to hold the company’s stock.

Keeping the customer happy has become less important to keeping the shareholders happy, which is the main reason that wages have been flat since the 1970’s; the huge improvements in productivity and efficiency during that period have all resulted in better compensation for executives and shareholders.  The difficulty in maintaining those dividends drove many companies to move production to China, which has resulted in huge short term profits, but the shrinking of the buying power of the consumer class in the United States.

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