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How the pursuit of shareholder value weakened the economy
Shareholder capitalism strikes again..

Quote:Research this week by Santander blows the whistle on the ever-growing portion of our monthly pay that goes on largely unavoidable household bills. It looked at bills for gas, electricity, water, TV, phone and so on – and found they have escalated in price far, far ahead of average wage rises. Since 2006, average pay packets in Britain have gone up by 19% in pounds and pence terms (in other words, not adjusting for inflation). Meanwhile, the average gas bill has gone up 73%, electricity 72%, and water 41%

At the top of the utility companies the view is very different. Just weeks after arguing against consumers having their bills capped to save them £100 a year, the boss of one utility, SSE, was given a 72% pay rise to £2.92m after this “robust performance”. The reward comes after years of bumper dividend payouts which have doubled from 32.7p a share 10 years ago to 62.5p most recently

The water companies have also been fabulous performers – for the stock market, not you. As a study by the University of Greenwich found last month, consumers are paying around £2.3bn more a year in water and sewerage bills to the privatised companies than if they had remained in state ownershipIt found they have invested no significant new shareholder equity, but have managed to extract nearly all of their post-tax profit as dividends. The report calculated that every household is worse off by around £100 a year as a result..
Forget austerity, here’s who is to blame for your empty pockets | Patrick Collinson | Money | The Guardian
Quote:Public pensions and college endowments are some of the biggest investors in hedge funds, investment vehicles that have made their managers some of the wealthiest people in the world. Middlemen funnel this public money into the hedge funds, as do funds of funds. All of them collect fees. Pensions could have been better off investing in cash than in hedge funds, largely because of the high fees investors pay hedge fund managers. Hedge funds haven't met the expectations for endowments over the past several years, either.
College endowments and public pensions enrich hedge fund billionaires - Business Insider
Quote:Up until the 1980s, investment by the US corporate sector averaged 4% of GDP while dividends averaged 2% of GDP. Today, it is the other way around. Distributed profits used to average 35-45% of total US corporate profits in the 1950s, which is why there was plenty left over to invest in growing the business. Yet for the past few decades, the trend has been unmistakable: less money for investment, more set aside for dividends. In the UK, 2017 is expected to be a record year after analysis by Capita showed that shareholders grabbed north of £33bn in the second quarter.
Governments have to invest in the fourth industrial revolution | Larry Elliott | Business | The Guardian
Quote:Toys “R” Us Inc. received court approval Tuesday to pay millions of dollars in bonuses to executives despite objections raised by a federal bankruptcy watchdog. Judge Keith Phillips of the U.S. Bankruptcy Court in Richmond, Va., signed off on the bonuses following lengthy arguments from lawyer Lynn Kohen on behalf of the U.S. trustee over the timing of the payments given the big-box retailer’s uncertain future. “I think there’s real fear here this debtor won’t survive past this holiday season,” Kohen said Tuesday. Kohen also said the bonuses at issue were really retention payments to company insiders that are prohibited under bankruptcy law.
Bankruptcy judge allows Toys ‘R’ Us to pay executive bonuses - MarketWatch
Quote:As Amazon builds up its distribution network, it’s hit on a trick long practiced by the likes of Walmart: using the federal government to help pay its workers. A new study by Policy Matters Ohio found that more than 700 Amazon employees receive food stamps, or more than 10 percent of the tech giant’s 6,000-strong workforce in the state. Some of those recipients may be part-time help, but the fact that they need federal aid to survive suggests that they would be happy to work more. “Why is this giant, successful company offering such limited pay and hours of work that many of its workers need help buying food?” asked Zach Schiller, research director at Policy Matters. 

Amazon ranks nineteenth among Ohio businesses in number of employees on food stamps, behind Walmart, McDonald’s, and Kroger. But Amazon is only the fifty-third-largest employer in Ohio, suggesting a higher rate of employees on food stamps than its counterparts. More important, Amazon has obtained at least $123 million in state tax incentives to place warehouse and data center locations in Ohio. This reflects a perverse form of double-dipping: Amazon gets a bounty to create jobs in Ohio, and then a good chunk of the jobs are so low-paying that workers have to seek federal assistance, providing a second subsidy for the e-commerce giant.
Amazon Is Thriving Thanks to Taxpayer Dollars | New Republic

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