As Profits Surge, Workers Still Wait
This is Wall Street's version of comfort food: Corporate earnings keep rising at a double-digit pace while workers are lucky to get even low-single-digit wage increases.
For the last few years, those trends have been dependable and soothing for many stock market bulls — if not for the average worker. It's a world in which share prices are underpinned by healthy earnings while inflation risks are muted because employee pay isn't in danger of an upward spiral.
The story continued in the third quarter ended Sept. 30. With nearly all of the companies in the blue-chip Standard & Poor's 500 index now having reported their earnings for the period, the year-over-year growth rate was once again in double digits.
By S&P's reckoning, operating earnings for the S&P 500 companies rose 11.5% in the quarter. It was the 14th straight quarter of double-digit growth, the data firm says....
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As for the workers whose toil is producing these handsome results, wages and salaries for all private-industry employees rose 2.2% in the 12 months ended Sept. 30, according to the government's employment cost index. That was down from a 2.6% increase in the year ended September 2004.
Add in benefits such as healthcare coverage, and total employment costs were up 3% in the most recent 12 months, compared with 3.7% in the previous period, government data show....(T)here are many ways to measure compensation, and "average" pay gains can be as misleading as "average" earnings growth....But few on Wall Street would dispute that corporate earnings have been fattened in recent years in large part because the rewards of the economic expansion — and spectacular gains in worker productivity — have primarily flowed to companies' bottom lines, not into employees' pockets....
http://www.latimes.com/business/la-fi-petruno27nov27,0,719749.column?coll=la-home-headlines
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