Corporate profits surge as workers’ income lags
(And it does not create jobs)
Posted: 11/27/2011 01:00:00 AM MST
By Floyd Norris
New York Times
In the eight decades before the recent recession, there was never a period when as much as 9 percent of U.S. gross domestic product went to companies in the form of after-tax profits. Now the figure is over 10 percent.
During the same period, there never was a quarter when wage and salary income amounted to less than 45 percent of the economy. Now the figure is below 44 percent.
For companies, these are boom times. For workers, the opposite is true.
The government’s first estimate of corporate profits in the third quarter was released two days before Thanksgiving, at the same time it revised the rate of GDP growth in the quarter down to an annual rate of 2.0 percent.
The report showed that effective tax rates, both corporate and personal, are well below where they were during most of the post-World War II era. Read More