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Saturday, July 2, 2011

":Historically unprecedented"

“Between the second quarter of 2009 and the fourth quarter of 2010, real national income in the U.S. increased by $528 billion. Pre-tax corporate profits by themselves had increased by $464 billion while aggregate real wages and salaries rose by only $7 billion or only .1%. Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. …The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented.”

A recent study by economists at Northeastern University illustrates one of the reasons the current "economic recovery" is illusory for most Americans. Average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.

When almost all the benefits are going to corporate America there can be no real recovery. With 90% of Americans treading water in uncertain times, demand for products won't rise significantly. Most corporations have squeezed out profits because productivity has risen 6% in that same time frame. Something has to give and as long as there is this 'historically unprecedented' distribution of growth it will be the stability and growth that made America the most powerful nation on earth.

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