“Them that’s got shall get / Them that’s not shall lose / So the Bible said, and it still is news…”

April 24, 2004

[…especially when no business cycle recovery in the post-WWII era has had its gains so skewed toward corporate profits and away from labor compensation]

Brad DeLong, UC-Berkeley Economics Professor and Blogger Extraordinaire, today highlights the following shocking fact from this week’s Economic Snapshot from the Economic Policy Institute [which, until today, I shamefully forgot to include in my list of “News Sources (Off the Beaten Path)”]:

The rise in the stock market over the last year reflects spectacular growth in profits but not a generally healthy economy nor sustainable growth. Profits have never fared better, nor wage and salary income so poorly for this period of the business cycle [namely, 11 quarters after the last business cycle peak during any cycle in the post-WWII era]. Since the last expansion ended in the first quarter of 2001, corporate profits in the United States have expanded by 57.5%. Meanwhile, private wage and salary income has contracted by 1.7% and total labor compensation has increased by a meager 1.5%.

If a picture’s worth a thousand words, then the following two pictures should be worth writing “Holy s#!t” a thousand times:

snap20040412fig1

*****************

snap20040412fig2

(Click on either picture to enlarge to full-size.)

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