Economists at Northeastern University have found where the money that once went to company employees has gone.
A new study released by the school shows that “corporate profits captured 88 per cent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 per cent” of growth.
The New York Times reports:
The study said it was “unprecedented” for American workers to receive such a tiny share of national income growth during a recovery … The share of income growth going to employee compensation was far lower than in the four other economic recoveries that have occurred over the last three decades, the study found.
“The lack of any net job growth in the current recovery combined with stagnant real hourly and weekly wages is responsible for this unique, devastating outcome,” wrote the report’s authors, Andrew Sum, Ishwar Khatiwada, Joseph McLaughlin and Sheila Palma. According to the Bureau of labour Statistics, average real hourly earnings for all employees actually declined by 1.1 per cent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.