Harold Meyerson, writing in the Washington Post a few days ago, explains why the current economic recovery is like no other since World War II.
In all previous recoveries “as the economy picked up and more revenue started flowing to business, those businesses shared the revenue with their employees. Mark Whitehouse of the Wall Street Journal looked at how businesses were dividing up the pie 18 months into every previous recovery since 1947 and found that 58 percent of their increases in productivity trickled down to their workers in increased wages.”
“This time around, the numbers are starkly different. Productivity increased 5.2 percent from the recovery’s start in mid-2009 to the end of 2010, he found, but wages rose by a minuscule 0.3 percent. That means just 6 percent of productivity gains have gone to our newly more-productive workers.
“Where is the other 94 percent going? To profits, which have been increasing at a record clip for the past three quarters. To funds on the corporations’ balance sheets, which the Federal Reserve calculates at nearly $2 trillion. To shareholders. To the companies’ stock buybacks.”
Read the full article here.