Corporate Profits Surge, Workers' Incomes Slip
It's long been true that workers are overdue for a raise. Stagnant wages combined with higher costs of fuel, health care and myriad other necessities mean most workers aren't doing as well as they once did.
Companies, however, are going gangbusters. Corporate profits rose to their highest percentage of total national income last year -- 14 percent, reports New York Times finance columnist Floyd Norris.
Citing data released by the Commerce Department last week, Norris notes that the last time corporate profits approached that peak was 1942, when many companies were converting to war production and had no shortage of business. Back then, corporate profits comprised 13.6 percent of total national income.
Moreover, Norris says, a review of first quarter 2011 data suggests that corporate profits are still on the rise, ticking up 0.2 percentage points to an estimated 14.2 percent of national income, well exceeding previous estimates of 13.1 percent.
Meanwhile, wage earners' share of total national income has slipped to its lowest level ever, falling below 50 percent last year for the first time since record-keeping began in 1929, and continuing to erode in the first quarter of 2011. (Although the figures don't include employer-provided health care and other benefits, the cost of which remains at near-record levels.)
As Norris notes: "That continued decline may help explain the economic worries of many Americans who have jobs but still fear they are falling behind."
It's not only hourly wage and salaried employees who are slipping, however. Smaller businesses, too, have seen their share of total national income shrink -- to a 17-year-low of 7.7 percent in 2009.
Although, the percentage did recover a bit (to 8.3 percent) last year and during the first three months of 2011.
It may be, as Norris says, "the worst of times for workers, and the best of times for companies." Whether it can remain so for much longer only time will tell.
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