WASHINGTON (MarketWatch) – It’s not news that Wall Street is doing much better than Main Street, but we didn’t know how much better it was until the government updated economic statistics dating back to 2008.
Here’s the grim report that won’t surprise anyone who’s been paying attention for the past three years: Fat cats are bigger than we thought, and ordinary people’s incomes are worse than we thought.
As part of its regular revisions to the National Income Accounts, the Commerce Department told us Friday that corporate profits in 2008, 2009 and 2010 were actually $343 billion higher than previous estimates.
And the personal incomes of American families were $265 billion lower in those three years than earlier estimates.
One last thing: gross domestic product has also been revised down. Read our article: “GDP edged up 1.3% in the second quarter.”
According to the latest data, US corporate profits are at record highs even as the US economy struggles. Profits have been totally decoupled from the economic fortunes of the American people.
This tells you everything you need to know about why the stock market recovered from the Great Recession and why employment didn’t.
Corporate profits now account for the largest share of gross domestic product since 1950 — 12.6%. Wages and salaries represent the smallest share of GDP since 1955 — 54.9%.
With unemployment still in the stratosphere, wages and salaries are depressed. Fewer people are working and those who are working don’t get a raise. According to a separate report released Friday by the Bureau of Labor Statistics, wages in the private sector have risen only 1.7% over the past year, half the rate of rising prices.
So Friday’s news is grim, but it’s not really news, is it? Everyone knows that the fight is fixed, as the poet sang. “The poor stay poor and the rich stay rich. That’s how it is, everyone knows it.