"But they’ve still managed to boost profits beyond anything ever seen before because they’ve got away with employing as few workers as possible at as low a rate as possible."
I think there are other factors.
1. US effective corporate tax rate has been declining as corporations have found ways to keep profits in offshore tax havens. This is a huge contributor.
See for example this article about AAPL whose effective tax rate is 14% which is much lower than the US nominal corporate tax rate of 35%.
2. Outsourcing to lower cost centers. This is also contributing to lower US wages; If a company can move the work to India, Brazil, China, etc. at a much cheaper cost, they will do that. This has been going on for decades, but advancements in telecommunications and internet has made outsourcing to far away locations more efficient and cost effective over the past 10-15 years.
3. Federal reserve keeping short term rates at 0% and manipulating other fixed income rates with the QE program, e.g. buying $100BLN worth of MBS and US treasuries every month. This had the effect of creating record-low interest rates for corporate and junk bonds. This lowers interest costs for companies and also increases business demand because more companies are able to borrow $$ than otherwise.
Some of the revenues and profits are increased just because corporate and public debt has increased abnormally.
I think there are other factors.
1. US effective corporate tax rate has been declining as corporations have found ways to keep profits in offshore tax havens. This is a huge contributor.
See for example this article about AAPL whose effective tax rate is 14% which is much lower than the US nominal corporate tax rate of 35%.
http://www.bloomberg.com/news/2013-05-23/apple-tax-rate-igno...
2. Outsourcing to lower cost centers. This is also contributing to lower US wages; If a company can move the work to India, Brazil, China, etc. at a much cheaper cost, they will do that. This has been going on for decades, but advancements in telecommunications and internet has made outsourcing to far away locations more efficient and cost effective over the past 10-15 years.
3. Federal reserve keeping short term rates at 0% and manipulating other fixed income rates with the QE program, e.g. buying $100BLN worth of MBS and US treasuries every month. This had the effect of creating record-low interest rates for corporate and junk bonds. This lowers interest costs for companies and also increases business demand because more companies are able to borrow $$ than otherwise.
Some of the revenues and profits are increased just because corporate and public debt has increased abnormally.