Labor Force's Share Of Income Plunges To Lowest Recorded Level

The labor force's share of income has plunged to its lowest level since the measure was first recorded.

The labor force's share of income -- or the percentage of national income -- fell to a nearly 60-year-low last quarter, according to data from the Federal Reserve bank of St. Louis. The share dropped to 57.1 percent, according to economist Nouriel Roubini, compared to an average of nearly 65 percent percent before the year 2000.

The low-level of national income that the labor force is taking home signals that though employers may be experiencing a growth in productivity, the rise in income is going towards company profits, not workers. The figures are just one measure indicating that income inequality is on the rise. The top one percent of earners saw their incomes grow by 275 percent between 1979 and 2009, according to the Congressional Budget Office, while the bottom fifth of earners experienced a 20 percent rise in income during the same period.

And though the economy is technically in recovery, that doesn't mean Americans' wallets are seeing a boost. The U.S. median income dropped in 2010 for the second year in a row to $26,364. Meanwhile, millionaires control nearly 40 percent of global wealth, according to an October report from Credit Suisse.

Overall, the U.S. median income has fallen more during the recovery than during the recession, according to an October study from two former Census Bureau officials.

But despite those falling wages, companies are squeezing all they can out of workers. Profits-per-employee rose in 2010 for the second year in a row, according to an October analysis from Sageworks. The report also indicated that corporate profits have been increasing without a corresponding boost in wages.

Workers don't expect to see conditions improve any time soon either. A full nine out of 10 American workers said they don't expect to get a salary increase next year that will be enough to cover the rising costs of food and fuel, a June American Pulse survey found.

Comments

[dtallwalk]

08:54 PM on 12/04/2011

I am retired blue collar but I did start a shop for a few years and a good friend told me how it all works
And I said no this can’t be how we do business in the US . he told me that it took ten years to understand Why the higher ups where telling him to do some of the thing he was told to do
His job was setting up vendor and suppliers for this BIG corp. that is still around and growing
This is my take on it the only way I know how to tell it
You set up ten suppliers after a while you tell the suppliers grow or go
Then you reduce the work you give five of the supplier (you squeeze them)
The other five you treat business as usual the first five begin see sales drop and
Start to cut their prices to get the work then you do the same to the second five
After a few years the big guy starts to get rid of the in house work now that
They can afford to now that the suppliers are in check with pricing

[dtallwalk]

08:54 PM on 12/04/2011

So in the end the big corp. has taken your profit and put it in their pocket
And if the supplier has issues with timing and quality it all on the suppliers check book
The supplier has to pay the overtime and for any losses in material replacement
To meet the big guy’s needs so in the end the big guy has a 15-30 percent gain in profit
With labor and material and pricing cuts and this all started in the mid seventies
So what I did I do simple I quoted simple fast work and made money and always had
A reason to tell the big guy why I am not quoting the more complex work
So I filled a needed slot where as the other suppliers had their hand full doing
The costly time consuming work and the funny thing is if you ask the suppliers who’s to blame for all of the competition they will tell you that it is the other suppliers cutting prices

[somewhatodd]

06:31 PM on 12/04/2011

ah yes, the fruit of free trade and communist china as the republicans' new and enviable role model.

[olitenup]

11:15 AM on 12/04/2011

Corpocracy continues it's ruination and decimation of the American people.

Are we angry enough to get off our arses and do something about it?

[alunsulen]

06:24 PM on 12/04/2011

Get off your arse, take a bath, get a job and start pulling your own weight. And that goes for all libs out there!

[somewhatodd]

06:32 PM on 12/04/2011

how old are you? you have have to be 17 at least to post here.

[olitenup]

08:37 PM on 12/04/2011

I have a job, at least I am not a jerk.

[fortressfountain]

10:41 AM on 12/04/2011

Fix the economy now! Make part-time hiring illegal unless it is a high school kid. Raise the minimum wage to $20.00 an hour to match the taxation and costs. Eliminate all debt-as it is mostly illegal debt.
Everyone has a clean slate to start over-get rid of the too big to fail etc

[Mandy Ann Osipchuk]

11:59 PM on 12/05/2011

Now thats a plan of action if I do say so my self! The rich got bailed out... we payed for that bill with OUR tax money... Now it is time to stimulate the economy for real! Sure some people would have to cut back, ya know sell a mansion on the beach or two... Maybe drop one of the 7 BMWs the family of 2 has, or maybe take a bus instead of a private jet... Do you think their wifes will go with out the weekly shopping spree and her 780.00 a pair shoes?

[AlanBannacheck]

09:09 PM on 12/03/2011

The hopelessness is absolute. Living standards will decline until they match the worlds.

[megwright]

10:28 PM on 12/03/2011

Alan, that is of course the point of this whole exercise. Offshore, bring in illegals, hire H1B workers, bust unions, lay off millions, and pretty soon you have a captive labor force that can't fight back, can't demand decent wages, can't demand overtime even when the law calls for it, can't demand good benefits (if they get any at all). Meanwhile, China's wages are rising. Sooner or later we'll meet in the middle. Will US jobs come back then? Or will the revolution come first?

[Mandy Ann Osipchuk]

12:01 AM on 12/06/2011

Question? who will these companys sell there products to if there customer pool is out of work living on the streets? Its like opening a Tiffanys in a homeless shelter? Can anyone answer that? Whats going on in there minds?

[Seriously217]

09:07 PM on 12/03/2011

Its just WRONG that businesses are getting richer by forcing fewer employees to do MORE without rewarding those employees accordingly for their effeciency and extra efforts when its only the top brass that is raking in more profits. Company owners "used" to place more value on their loyal employees; now employees are just like commodities that can easily be traded for profits and that really says a lot about what our value system is these days.

[pinetrale]

04:31 AM on 12/04/2011

Yes that's so. Its now been three years since the financial crises and no meaningful changes have been instituted by Washington other than a few proposed minor tweaks. No one prosecuted, no pay reform, no increase in worker wages really, in fact the sacrifice on workers is just higher while thier government services, except the police have been continually cut. The country is run by interests other than the people's and it has no intention of changing no matter whom we elect from the slate.

[killarneytim]

06:42 PM on 12/03/2011

This sad situation has been created by technology and globalization. To blame a political party does not solve the problem. What we need is a national manufacturing policy. We need to promote our advantages,change our tax codes,reform education,change our export laws ,develop our own energy and get tariff parity with China.

[Mister Grumpy]

08:13 PM on 12/03/2011

Knowing that the GOP is against educating the masses, eliminating worker protections, and protecting the 1%'ers, do you still think that blaming a political party won't solve the problem. It will if the voters evict those that caused this...........

[killarneytim]

11:38 PM on 12/03/2011

You make a good point but I still believe the blame game is just that , not a solution. To go to one party only may well not solve much. I think we need the diversity of opinion from both sides. The biggest failure we have had , the financial collapse , was a bipartisan effort. It would have happened if the congress was all left or all right. If you want to evict those that caused it, I am with you, it means the entire congress and I think that would be great for the country.Every single one. I am angry too.

[pinetrale]

04:34 AM on 12/04/2011

I still don't know why the republicans don't nationwide attempt to decharter all the state universities as being too expensive and against the private business interests for training too many "libs". Already they are looking at eliminating birth control for woman, so why not eliminate higher education for the "masses". It will help them consolidate political power as the electorate becomes even more ignorant and in the palm of their hands.

[4TJefferson]

05:01 PM on 12/03/2011

GET RID OF ALL THE GOPERS 2012!

[4TJefferson]

05:00 PM on 12/03/2011

GOPERS/TPBAGGERS have seen the future of America and it looks like China; Living on $360 per year and eating fish heads and rice if you are lucky.

[jcolvin325]

04:03 PM on 12/04/2011

Progger please !! Both parties are on the take.

[4TJefferson]

07:37 PM on 12/04/2011

No they are not CON.

[Aerin Gael]

04:28 PM on 12/03/2011

this is a great article. I can't understand why we let republicans get away with the "job creator" line for one second more!
"http://www.businessweek.com/news/2011-12-01/raise-taxes-on-rich-to-reward-true-job-creators-nick-hanauer.html"

[inra]

02:43 PM on 12/03/2011

Four reasons to vote Republican!!
The more income the !% get the MORE JOBS WILL BE CREATED!
Get rid of the minimum wage MORE JOBS WILL BE CREATED!
Cut gov't regulation (those child labor laws are the worst) MORE JOBS WILL BE CREATED!
OOPS I had four reasons. What was the fourth?

[BulldogDad]

03:14 PM on 12/03/2011

Your'e just joking, right?

[inra]

09:05 AM on 12/04/2011

I am, but sadly others believe the BS.

[webwzrd]

02:15 PM on 12/03/2011

Many studies have shown that there is a direct correlation between the fall in union membership and the stagnation of wages for ALL labor. Starting with Reagan, Republicans have supported business in an all out war agains unions, which has now come to a head with the blatant attacks in Wisconsin and Ohio. They have demonized union memebrship and characterized them as "elite workers" who make more than non union, which implies that making a fair wage somehow makes you "elite". Add to that the tax and other policies that favor the wealthy over everyone else and it's no surprise that we well on the way to creating a society of permanent poverty.

And so the class warfare continues. Business make higher profits at the expense of workers. The rich get richer at the expense of the working classes. The average American gets closer to poverty every day. Yet with all the current and historical facts staring them in the face, conservatives keep arguing for and pushing the same failed ideology. The sacred "Job Creators" are pandered to at every opportunity for not creating jobs and hard working Americans are criticized for being poor and demanding better.

America needs to wake up and demand a government by and for THEM once again.

[megwright]

10:32 PM on 12/03/2011

The average non-union American never knew that it was unions that kept their wages high too.

I retired as an HR manager at a large, very anti-union corporation. Every year we conducted a salary survey at all the local union plants, then we adjusted our pay scale accordingly. Our goal was always to pay at or slightly higher than union scale to avert any possible union organizing attempt.

With the demise of unions, non-union companies no longer have anything to fear, so no need to pay living wages.

[webwzrd]

10:39 PM on 12/03/2011

Exactly. Thanks for posting.

[dpkjj]

12:28 AM on 12/04/2011

Thanks for continuing to remind us of this. Do some of these anti-union folks have any idea what labor conditions would be like without unions?

[nanimal]

12:26 PM on 12/03/2011

That's not news..American's wages have been decreasing since Reagan was in office. Reagan was a Wall Street tool.

[pattithepolitico]

12:05 PM on 12/03/2011

When I read that auto makers are selling more cars at higher prices it makes me wonder why people haven't figured out that 1. labor is cheaper, 2. parts are cheaper (coming from overseas), 3. cars more expensive and no one asks why they are making record profits. With all the concessions on pay, benefits, etc. why shouldn't the cars be cheaper? Just another way to get rid of the unions and pay the guys at the top more. Doesn't anyone look at this as being immoral? When is profit too much profit. Sadly this has become the norm in these United States and no one seems to question it. It's all at the expense of the middle class and poor and no one seems to want to change it. The 1% are the most revered, but what happens when the middle class can't consume any more? Oh that's right, they will sell it all to China and India and the U.S. becomes the new China/India.

[Mandy Ann Osipchuk]

12:13 AM on 12/06/2011

Only 20 percent of the HUGE population of China has indoor plumbing these people are so poor. I think India is even poorer. They cant afford clothes or shoes let alone a pence on anything that you cant eat or drink. I guess the rich will have to sell to the rest of the rich...