The Dow hit at an all-time high - so who’s benefiting?
Amid all of the excitement about the Dow’s record-setting numbers yesterday, there’s a lingering question: If the Dow’s doing so well, why aren’t most Americans?
L.A. Times columnist Michael Hilzik tackled that question today. He points to the divergence of corporate earnings and workers’ wages as an indication of the strong disconnect between stock market success and the wealth of average Americans.
From 1950 through the 1970s, corporate profits hovered in the range of 5% to 7% of GDP. They dipped as low as 3% in 1986, but since then have staged a long-term ascent that has brought them to 11% today, their highest level since World War II.
The average worker’s share of those profits, in the meantime, peaked at 53% of GDP in 1970, and have been on the decline ever since, hitting 44% last year.
And then there’s this finding:
From 1993 through 2010, according to UC Berkeley economist Emmanuel Saez, the top 1% of income earners captured 52% of all real income growth.
Read more on the gap between Wall Street earnings and your own pocketbook here.
Photo: Richard Drew / Associated Press