Income Inequity

Krugman_No Trickle Down

Worker Compensation Relative to Corporate Profit

After yesterdays blog, I happened on this chart depicting the varying rates of change in business profits and the income of workers. This is a great indication of the growing income diversity I mentioned. For the past years and as this recovery draws slowly on, we see an ever widening gap developing here. In this chart to the right is total workers’ compensation in blue and profits in red, both shown as indexes with the quarter before the recession at 100: Courtesy of Paul Krugman. In some circles this is argued as the way of free enterprise with in this case management/owners/investors deserving more than the workers.

So I took a quick peek at where this divide began and the degree of this wedge. I found some good work already done by Lawrence Mishel identifying some causes including the rising difference between income being earned from owning capital and income

Wedge Between Productivity and Compensation Growth, Economic Policy Institute

being earned by workers. I’ve touched before on how our tax policies are today influencing this massive redistribution of wealth. Yesterday made the point of allowing the “temporary” tax reductions to expire. Clearly I need to spend time researching and making my point.

Today however is Easter, and after a wonderful brunch with friends (Award winning author Chris Jackson) aboard their boat, it is simply time to play and enjoy a little music and relaxing. I’ll leave you with this chart depicting the growing divide between productivity and hourly wages and my promise to get in depth in the near future.


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