Josh Bivens of the Economic Policy Institute asks that question because the latest numbers force him to.
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%.
Most of this growth in total labor compensation has been accounted for by rising non-wage payments, like health care and pension benefits. Rapidly rising health care costs and pension funding requirements imply that these higher benefit payments are not translating into increased living standards for workers, but are rather just covering the higher costs of health care and pension funding. Growth in total wage and salary income, the primary source of take-home pay for workers, has actually been negative for private-sector workers: -0.6%, versus the 7.2% gain that is the average increase in private wage and salary income at this point in a recovery.
These are ominous signs, suggesting a new march toward greater inequality in the American economy. Worse, the growth in profits combined with a drop in wage and salary incomes suggest that the recovery has a narrow base, with most American consumers only able to increase their purchasing power through debt. Wage growth is not just fair, it is also necessary for a more sustainable recovery. (emphasis mine)
Amen. And check out the chart (click the title). The difference between the Bush recovery and every other recovery is startling. Brad DeLong adds:
It is absolutely remarkable–the fall in the employee compensation share of GDP from 66.5% in late 2000 to 62.7% today. Usually the factor shares are remarkably constant over the business cycle. But now it appears that we are, for once, in an economy behaving according to the sixty year-old theories of Michel Kalecki: high labor market slack as a way of keeping a lid on real wages, and as a tool of class war.
Hey, give them credit for noticing, commenting…and proving what we’ve been saying for awhile now.