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Where's the economic recovery?
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Contributor | RP |
Last Edited | RP Mar 09, 2011 11:59am |
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Category | Analysis |
Author | Harold Meyerson |
Media | Newspaper - Washington Post |
News Date | Wednesday, March 9, 2011 05:00:00 PM UTC0:0 |
Description | Our current recovery, alas, is different from all previous recoveries that America has experienced since the end of World War II. The earlier ones were marked by wage increases. 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.
Indeed, many of the nation's leading corporations have been spending more money buying their own shares than they have on job-creating investments, research and development, or higher wages. |
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