As Corporate Profits Rise, Workers’ Income Declines

THESE are the worst of times for workers, and the best of times for companies...The Commerce Department last week reduced its estimates of economic growth in 2010 and early 2011. At the same time, it said corporate income was much better than it had thought...the department raised its estimates of corporate profits by 8.3 percent for 2009 and 10.8 percent for 2010.

The new figures indicate that corporate profits accounted for 14 percent of the total national income in 2010, the highest proportion ever recorded...

The news is not so good for smaller enterprises... The latest figures indicate the smaller businesses’ share of national income fell to a 17-year low of 7.7 percent in 2009, but recovered to 8.3 percent in 2010 and in the first quarter of this year.

Employees have always received more than half the total national income, until now. In 2010, the percentage of national income devoted to wages and salaries fell to 49.9 percent, and it slipped a little more to 49.6 percent in the first quarter of this year...The figure for wages and salaries reflects only what employees are directly paid, and does not include the cost paid by employers for benefits...Adding the two categories together may provide a better view of the share of national income going to workers or being spent for their benefit.

The 2010 total, of 62.1 percent, is not close to the record low share of 54.5 percent, set in 1929, the first year for which numbers are available. But it is the lowest for any full year since 1965. In the first quarter of 2011, it slipped further, to 61.7 percent.

Corporate profits more than kept up with inflation. Other categories of income did not.

http://www.nytimes.com/2011/08/06/business/workers-wages-chasing-corporate-profits-off-the-charts.html?_r=1