Economic Cost and Profit (Essay Sample)

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Economic Cost and Profit
The article selected for this discussion entitled “ Corporate Profits hit Record as Wages Get Squeezed” appeared in CNN Money on the 4th of September 2012 and was authored by Chris Isidore. ( The link to the article is  HYPERLINK "http://money.cnn.com/2012/12/03/news/economy/record-corporate-profits/" http://money.cnn.com/2012/12/03/news/economy/record-corporate-profits/). The article is about the huge profits that corporate companies are reaping, from their operations, following the end of the great depression four years ago. According to the gross domestic product report, the corporate earnings are up by 18% from the previous year. This is actually the biggest after-tax profits of GDP in history. Company owners are in celebrations as they have reaped big after a period of economic shutdown. Corporate profits took a big hit during the recession period from 2008. However, managers are all smiles that they have managed to bounce back on track. Corporations will now be able to execute their plans and expand in their operations. Shareholders who have been waiting for their returns are now able to get them back. It is noted that profits, which fell to as low as low as 4.6 percent during the recession, were now up by over 6 percent.
However, these celebrations are not without pains caused. There is a cost incurred in the process of improving on profits. Company employees are crying foul because of the freeze in their wages. Labor wages have been resized downwards by a big margin in order to foster growth. Despite this bounce back in company profits, the labor market is still not up to the beat. As noted by Heidi Shierholz, an economist with EPI, there is no much positive change in the labor market. The article states that the profit...