SUPER BOWL 52: Patriots-Eagles February 4 | New England Patriots Coverage | CBS Philly Coverage
WEATHER ALERT: Heavy Rain, Wind, Ice  | Forecast | Blog | Radar | Weather App
By Joe Mathieu, WBZ NewsRadio 1030

BOSTON (CBS) – You know the old saying, “you’ve got to spend money to make money.”

Well since the recession hit five years ago executives at major corporations have not followed that advice. They instead cut spending and squeezed more out of their workers to send profits ever higher while sitting on a big pile of cash.

A pile that keeps growing.

Research from the Progressive Policy Institute, first reported by USA Today, finds companies have held-off on spending more than $2 trillion since the economy turned lower in 2008. A half-trillion of that was just last year.

That’s good for the boss who gets a bonus. It’s also good for shareholders who get higher returns in the market. But it’s not so good for you.

In fact this lack of capital spending by companies means lower productivity, slower growth, and yes, lower wages.

Indeed, real wages in this country are still lower than they were five years ago. And the average chief executive of a major corporation made more than 270 times as much as the average worker last year, according to a study by the Economic Policy Institute.

But that gap could begin to close if executives start spending money. It’s Economics 101 – increased investment leads to higher productivity, higher profits and eventually higher wages.

Which reminds me of another old line, “you can’t cut your way to prosperity.”

Follow Joe on Twitter @joemathieuwbz


Leave a Reply

Please log in using one of these methods to post your comment:

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More From CBS Boston

Opioid Crisis
Download Our App

Watch & Listen LIVE