Tuesday, June 22, 2004

The New Face of Economic Recovery

Just when I thought that the Bush administration couldn't be any more cynical, Kevin Drum links to this outstandingly clear, altogether depressing, but potentially rabble-rousing chart published by the Economic Policy Institute:

The kind folks at EPI describe the situation:

Despite recent good news on employment growth, the current economic recovery, now approaching its third year, remains the most unbalanced on record in respect to the distribution of income gains between corporate profits and labor compensation. Essentially, rapid gains in productivity have been translating into higher corporate profits without increasing the wage and salary income of American workers.

The chart [above] shows growth in corporate profits and total labor compensation (the sum of all paychecks and employee benefits in the U.S. economy) over the last 12 quarters; measuring profit growth since the peak of the last recovery in the first quarter of 2001. [Footnote: This recession/recovery period is also notable for being the first on record where corporate profits were higher in the trough quarter than in the peak quarter.]

Corporate profits have risen 62.2% since the peak, compared to average growth of 13.9% at the same point in the last eight recoveries that have lasted as long as the current one. This is the fastest rate of profit growth in a recovery since World War II.

Total labor compensation has also turned in a historic performance: growing only 2.8%, the slowest growth in any recovery since World War II and well under the historical average of 9.9%.

Profit in the name of gross inequality . . . would we have it any other way? Come November, we'll find out.