Corporate profits have reportedly hit a record high as wages for employees continue to tumble, according to the New York Times.
The recent report released by the Bureau of Economic Analysis explains that profits have even been adjusted for inflation. In other words, it would seem that the corporate end of the business world is doing much better following the recession.
Corporate earnings were approximately $1.75 trillion in the third quarter of 2013. This number is up 18.6 percent from last year. These profits made up roughly 11 percent of the US economy during the last quarter.
Sadly, employees are seeing wages reach an all-time low. According to Robert Brusca, economist with FAO Research in New York, this an unfortunate part of the game.
“That’s how it works. If one gets bigger, the other gets smaller,” he explained to Yahoo! News.
Heidi Shierholz, an economist with the Economic Policy Institute, also said that corporate profits are currently on the way back up following the recession which plagued the country a few years back.
“Corporate profits took a big hit in the recession like everything else, but they’ve seen a massive bounce back,” Shierholz said. “Wages are determined by what’s going on in the labor market and we haven’t seen a big bounce back there.”
Shielholz added, “[Businesses] have a capacity to employ more people, but it makes no sense to hire more people until you have demand for your stuff.”
Wages have reportedly fallen to a record low of 43.5 percent of the gross domestic product. Although most people would assume that corporate honchos are keeping more than their fair share of the money, Brusca explained this simply isn’t the case.
“It’s not because bad capitalists are keeping all the money,” he said.
Are you surprised that corporate profits have hit a record high while employees’ wages are currently at an all-time low?