Skip to main content

Third quarter numbers show that U.S. corporate profits have hit a record high while workers' wages are now at their lowest share of GDP (again).  Why again?  See, corporate profits are like Batman movie ticket sales.  Every time the new numbers come out they're bigger than the last ones.

Just four years after the great recession corporations are back to beyond full strength while wages are more stagnant than a fat man's arteries.  This comes as no surprise to "economists":

"That's how it works," said Robert Brusca, economist with FAO Research in New York, who said there is a natural tension between profits and the cost of labor. "If one gets bigger, the other gets smaller."
This oversimplification misses the point entirely: the degree to which corporations are profiting is so extreme that wages could very easily be on the fast rise and companies would still be flush.

According to last week’s Gross Domestic Product report, corporate earnings were $1.75 trillion during the third quarter.  Despite the insistence by the Far Right that the corporate tax is too high, a laughable assertion, corporate after-tax profit now represents the greatest percentage of GDP in history.  Profits accounted for 11.1 percent of the economy last quarter.  During the height of the recession that number had fallen to 4.6 percent.

The corporate growthsplosion came largely from the financial sector, according to the New York Times:

Domestic profits of financial corporations rose $71.3 billion in the third quarter, after falling $39.7 billion in the second. Domestic profits of nonfinancial corporations, on the other hand, decreased $1 billion in the third quarter, after rising $27.8 billion in the second quarter.
Despite a modest increase in hiring by employers, economic growth has greatly outpaced growth in hourly wages.  Workers are now crowded around their lowest share of the economic pie to date:
A separate government reading shows that total wages have now fallen to a record low of 43.5% of GDP. Until 1975, wages almost always accounted for at least half of GDP, and had been as high as 49% as recently as early 2001.

Originally posted to WePartyPatriots on Wed Dec 05, 2012 at 12:00 PM PST.

Also republished by In Support of Labor and Unions.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site