Happy Labor Day

In the spirit of a holiday to celebrate the American worker, the always brilliant BBC offers up a sobering look at the state of the US labor force. Basically, Bushenomics has undercut the real wages of the average worker in a time of record corporate profits. As productivity soared, fewer workers reaped the benefits (italics from the article).

Productivity - the measure of the output of the economy per worker employed - grew even more strongly, by 16.6%.

But over the same period, the median family's income slid by 2.9%, in contrast to the 11.3% gain registered in the second half of the 1990s.

Average hourly real wages for both college and high school graduates actually fell between 2000 and 2005, and fewer of the jobs they found carried benefits such as health care or company pensions.

Companies and shareholders are keeping an ever greater share of the resulting economic output.

One way to comprehend what is happening is to look at the split between how much of the economy is won by profits and how much by wages.

The share allotted to corporate profits increased sharply, from 17.7% in 2000 to 20.9% in 2005, while the share going to wages has reached a record low.

Indeed, the rich are getting richer.

The incomes of the top 20% have grown much faster than earnings of those at the middle or bottom of the income distribution. The income of the top 1% and top 0.1% have grown particularly rapidly.

As Warren Buffet, the second richest man in the world put it, “The class war is over. My side won”.