Conservatives who are puzzled by the rise of “populist” sentiments in the left and center of the political spectrum, or who wonder why progressives become furious when Republicans propose more tax and regulatory relief for “job creators,” need to come to grips with some very basic economic facts. They were succinctly summarized last night by Catherine Rampell at the New York Times‘ Economix blog:
The economy has been growing now for 10 straight quarters. It has even made up the ground lost from the recession, and the United States now churns out more goods and services than it did before the downturn began in 2007. But that output is being produced with six million fewer workers, despite population growth.
As a result, the share of income produced in the country that is flowing to workers’ bank accounts has been steadily shrinking.
Of every dollar of income earned in the United States in the third quarter of 2011 — the latest period for which data is available — just 44 cents went to workers’ wages and salaries. That is the smallest share since the government began keeping track in 1947….
On the other hand, American businesses are doing extremely well.
Tepid job growth, stagnant wages for existing employees and growing international demand for American products have all helped corporate profit margins reach all-time highs.
You’d almost be tempted to think there was some sort of “class warfare” going on.