Monday, 27 February 2017 / TRUTH-OUT.ORG
  • Bill Gates Is Clueless on the Economy

    Dean Baker for Truthout: Last week Bill Gates called for taxing robots. It's nice to see the world's richest person proposing a measure aimed at redistributing money. Unfortunately, his idea makes no sense. We must stop assuming that productivity growth is the enemy of workers.

  • CPAC Dispatch: How Donald Trump Killed Movement Conservatism

    Now that the "alt-right," personified by Stephen Bannon, is in the White House, conservative leaders are trying to assess the correct place for it within the greater movement.

KEEP INDEPENDENT
MEDIA ALIVE

Truthout's fearless journalism is powered by readers like you.

The day-to-day costs to keep Truthout running are significant. We are in critical need of your support.

Can you take a moment to help keep us online and publishing?

Click here
to donate.

Corporate Margins and Profits are Increasing, But Workers’ Wages Aren’t

Sunday, February 26, 2012 By Pat Garofalo, ThinkProgress | Report
  • font size decrease font size decrease font size increase font size increase font size
  • Print

As we’ve been noting, corporate profits have made it back to their pre-recession heights (even if corporate tax revenue hasn’t followed suit). In fact, in 2011, corporate profits hit their highest level since 1950. But as Bloomberg News noted today, this hasn’t translated into wage growth or more purchasing power for workers:

Companies are improving margins and generating profits as wage growth for the American worker lags behind the prices of goods and services…While benefiting the bottom line for businesses, the decline in inflation-adjusted wages bodes ill for the sustainability of economic growth as consumers may eventually be forced to cut back. [...]

Of the 394 companies in the Standard & Poor’s 500 Index that have reported since Jan. 9, earnings for the quarter ended Dec. 31 increased 5.1 percent on average and beat analyst estimates by 3.2 percent. Some 70 percent of the companies have posted better-than-projected results.

This pattern has become all too familiar during the slow economic recovery. In fact, real wages fell in 2011, despite record corporate profits. “There’s never been a postwar era in which unemployment has been this high for this long,” explained labor economist Gary Burtless. “Workers are in a very weak bargaining position.”

Between 2009 and 2011, 88 percent of national income growth went to corporate profits, while just 1 percent went to wages, a stat that is “historically unprecedented.”

Pat Garofalo

Pat Garofalo is Economic Policy Editor for ThinkProgress.org and The Progress Report at American Progress.


Hide Comments

blog comments powered by Disqus
GET DAILY TRUTHOUT UPDATES
Optional Member Code

FOLLOW togtorsstottofb


Corporate Margins and Profits are Increasing, But Workers’ Wages Aren’t

Sunday, February 26, 2012 By Pat Garofalo, ThinkProgress | Report
  • font size decrease font size decrease font size increase font size increase font size
  • Print

As we’ve been noting, corporate profits have made it back to their pre-recession heights (even if corporate tax revenue hasn’t followed suit). In fact, in 2011, corporate profits hit their highest level since 1950. But as Bloomberg News noted today, this hasn’t translated into wage growth or more purchasing power for workers:

Companies are improving margins and generating profits as wage growth for the American worker lags behind the prices of goods and services…While benefiting the bottom line for businesses, the decline in inflation-adjusted wages bodes ill for the sustainability of economic growth as consumers may eventually be forced to cut back. [...]

Of the 394 companies in the Standard & Poor’s 500 Index that have reported since Jan. 9, earnings for the quarter ended Dec. 31 increased 5.1 percent on average and beat analyst estimates by 3.2 percent. Some 70 percent of the companies have posted better-than-projected results.

This pattern has become all too familiar during the slow economic recovery. In fact, real wages fell in 2011, despite record corporate profits. “There’s never been a postwar era in which unemployment has been this high for this long,” explained labor economist Gary Burtless. “Workers are in a very weak bargaining position.”

Between 2009 and 2011, 88 percent of national income growth went to corporate profits, while just 1 percent went to wages, a stat that is “historically unprecedented.”

Pat Garofalo

Pat Garofalo is Economic Policy Editor for ThinkProgress.org and The Progress Report at American Progress.


Hide Comments

blog comments powered by Disqus