Read It Here First: NYT on Inflation, Personal Income and Corporate Profits
Today's NYT has an article on Inflation, Wages, Income and Corporate Profits.
Graphic via St. Louis Fed
Here is a quick excerpt:
In the first quarter of 2006, wages and salaries represented 45 percent of gross domestic product, down from almost 50 percent in the first quarter of 2001 and a record 53.6 percent in the first quarter of 1970, according to the Commerce Department. Each percentage point now equals about $132 billion.
Total employee compensation — wages plus benefits — has fared a little better. Its share was briefly lower than its current level of 56.1 percent in the mid-1990’s and otherwise has not been so low since 1966.
Over the last year, the value of employee benefits has risen only 3.4 percent, while inflation has exceeded 4 percent, according to the Labor Department.
In 2004, the top 1 percent of earners — a group that includes many chief executives — received 11.2 percent of all wage income, up from 8.7 percent a decade earlier and less than 6 percent three decades ago, according to Emmanuel Saez and Thomas Piketty, economists who analyzed the tax data."
Here's some of our prior discussions during the last few years:
Real Wages Fail to Match a Rise in Productivity
STEVEN GREENHOUSE and DAVID LEONHARDT
NYT, August 28, 2006
The Seasonal Cycle and the Business Cycle
St Louis Fed
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A slim majority of Americans (which is enough) have knowingly or unknowingly supported policies which give a disproportionate share of the windfall from an unpredented combination of global trade and high technology (developed over generations) to corporations and to the top 2% of folks who own 50% of the shares.
What's the phrase "Never was so much owed by so many to so few"? This is "Never was so much given by so many to so few". We even give them tax breaks in a time of war while some of those in the "economic draft" give their lives.
And where did that investment go? Mine went to create jobs in India and China via EM equity funds. I'm sure I was not alone. So, those tax breaks didn't even create jobs in this country. On top of that, the imbalance in the budget and the likelihood of currency depreciation is, IMO, an unsung reason for the rise in prices of long-dated oil contracts. (Who wants dollars? I'd rather own future oil production.) And that inflation hurts who the most? Inflation on the things we need to live is regressive.
Regular folks are getting screwed, whether they know it or not.
Posted by: wunsacon | Aug 28, 2006 9:27:42 PM
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