Corporate Profits at All Time High, Wages Not So Much….

NEW YORK (CNNMoney) —

Just four years after the worst shock to the economy since the Great Depression, U.S. corporate profits are stronger than ever.   In the third quarter, corporate earnings were $1.75 trillion, up 18.6% from a year ago, according to last week’s gross domestic product report. That took after-tax profits to their greatest percentage of GDP in history.   But the record profits come at the same time that workers’ wages have fallen to their lowest-ever share of GDP.   “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 back there.”   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.

Read more: http://www.kcra.com/news/money/Corporate-profits-hit-record-as-wages-get-squeezed/-/11797182/17631336/-/4s9mdg/-/index.html

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