Working America may still be struggling, but major corporations are doing better than ever. According to a Monday New York Times report, we currently live in a “golden age for corporate profits,” even as economic growth and job creation sputter.
“With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers,” writes the Times’ Nelson Schwartz.
The vast distance between corporate profits and declining working class fortunes may look especially pronounced now, but it’s not a deviation from longstanding trends. According to an April 2012 study from the Economic Policy Institute, hourly worker compensation stopped rising with productivity gains right around the mid-1970s. Since then, wages have stagnated even as economic productivity has continued a steady, multi-decade climb. Had the federal minimum wage kept up with productivity since the 1960s, it would be $21.72 per hour instead of just $7.25.
Just how lopsided the recovery has been becomes even more obvious when you look at household income. As Timothy Noah wrote in The New Republic, “When you look at the economic recovery’s first two years, the top one percent …. captured 121 percent of all pre-tax income gains.”
What small income gains the middle and lower-class made during that time seem to have stopped months ago. Noah again: “Since May, there’s been no statistically significant increase in median income. For the typical American worker, then, recovery from the 2007-2009 recession began in the fall of 2011 and was over that following spring. Hope you liked it!”