You can’t look at today’s news and do anything but wince. 18,000 jobs created and the numbers in April and May were revised downward.
Unpacking the numbers a bit, 57,000 private sector jobs were created, while budget cuts pushed 39,000 folks out of work in the public sector.
So how are businesses doing?
Combined second-quarter earnings for companies in the Standard & Poor’s 500-stock index are expected to be up 13.6% from a year ago, according to an analysis of Wall Street forecasts by Brown Brothers Harriman. “Corporate profits have been much stronger than the economy in general,” says Charles H. Blood Jr., a market strategist at the New York financial-services firm.
Sure there are worries. There are always worries. But that hasn’t stopped corporations from piling up more cash reserves than they ever have and keeping wages low.
In fact, it’s historic…
[…] they say this recovery is unlike any other in more than six decades because of the “absence of any positive share of national income growth due to wages and salaries received by American workers.”
The study’s authors-Andrew Sum, Ishwar Khatiwada, Joseph McLaughlin and Sheila Palma-write that from the start of the recovery through the end of the first quarter of 2011, national income increased by $505 billion. But none of that growth came from a rise in aggregate wages and salaries.
So what accounted for nearly all of the growth? Pretax corporate profits, which rose by $465 billion-or 92 percent of the total.
The researchers compare this recovery to other post-recession periods since 1975. Of the four, only one-2001-03-saw corporate profits account for more than half (53 percent) of national income growth. And in 1991-92, corporate profits’ share was minus 1 percent, while aggregate wages and salaries accounted for 50 percent.
Let’s make sure we all see that number clearly…92 percent of the total national income has been gained via corporate profits.
What to make of this? Well, I have my opinions, and I’ve shared them before. Frankly, it’s pretty ridiculous, but nobody can force corporations to hire anybody or pay their workers more. But isn’t it a shame that the mood in this country in many C-suites seems to be so stingy? I mean, I get tightening belts, etc, if it’s needed. But it’s clearly not. The big time private sector is flourishing.
And where does that flourish go?
The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.