Corporations Are Raking In Record Profits, But Workers Aren’t Seeing Much of It

From the Wall Street Journal:

U.S. Companies Post Profit Growth Not Seen in Six Years

America’s largest companies are on pace to post two consecutive quarters of double-digit profit growth for the first time since 2011….Earnings at S&P 500 companies are expected to rise 11% in the second quarter, according to data from Thomson Reuters, following a 15% increase in the first quarter.

That sounds great! So does that mean worker pay has also posted strong growth? Let’s take a look:

I’ve used the employment cost index, which accounts for things like health care and other benefits, not just wages. And since corporate profits were down in 2015-16, I’ve used two-year growth rates, adjusted for inflation, to get a fair reading of longer-term earnings vs. pay.

As you can see, employee compensation growth roughly matched corporate profit growth in 2016, but in the first half of 2017 corporate profits have spiked while wage growth has been meager. Basically, corporations have manufactured profits by being stingy with workers.

I’m certainly happy to see businesses doing well. But I’d be a lot happier if this meant that workers were doing well too.

BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things they don’t like—which is most things that are true.

No one gets to tell Mother Jones what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

payment methods

BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things they don’t like—which is most things that are true.

No one gets to tell Mother Jones what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate