Thanks for a great read. I’m reblogging to DCC.
As a percentage of GDP, corporate profits are currently at an all time high, while wages are at an all time low using the same measurement. CNN Money explains why:
“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.”
Profits accounted for 11.1% of the U.S. economy last quarter, compared with an average of 8% during the previous economic expansion. They fell as low as 4.6% of GDP during the recession.
“Corporate profits took a big hit in the recession like everything else, but they’ve seen a massive bounce back,” said Heidi Shierholz, an economist with the Economic Policy Institute, a liberal think tank. “Wages are determined by what’s going on in the labor market and we haven’t seen a big bounce…
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