Thursday, July 31, 2014

[NJFAC] Workers are getting smaller share of income

Employees' Pay in U.S. Is Smaller Slice of Income Pie

, Bloomberg, Jul 30, 2014

Worker pay was a smaller piece of the U.S. income pie than earlier estimated as some Americans collected significantly more in interest and dividend payments over the past two years.

Employee compensation, including wages and benefits, was lower for each year from 2011 to 2013 than previously calculated, according to revised data from the Commerce Department issued today in Washington. The figures highlight the debate over inequality that flared this spring with French economist Thomas Piketty's work showing that the wealthy pull ahead by reaping disparate rewards from financial capital.

"It's even more money going to very high-income people relative to the rest of the country," said Harry Holzer, professor of public policy at Georgetown University and former Labor Department chief economist. "We were a little worried about it and now we're a little more worried about it."

With the revisions, employee compensation was reduced by $9.5 billion in 2011, $5.1 billion in 2012 and $14.6 billion last year, Commerce data showed. It accounted for 52 percent of gross domestic income in the last quarter of 2013, down from a prior estimate of 52.2 percent. The government revised GDI data back to 2003, before adjusting for inflation.....

More rank-and-file workers are participating in the recovery as companies report record profits and boost hiring. Compensation has accelerated this year, rising $134.8 billion after a $153.4 billion surge in the first quarter. It marked the biggest back-to-back gains since the six months ended in the first quarter of 2007.

That's because companies are hiring again and more people are returning to the workforce, not necessarily because paychecks are getting fatter, said Gary Burtless, a labor economist at the Brookings Institution in Washington.

"We've added millions of people to the payroll since the low point of the economy, but we haven't added at all to the payouts that workers are receiving," Burtless said. "Little has flowed to workers except as an increase in their employment rate."....

"Everything's coming up roses for people who own a chunk of American capital," Burtless said. "What we've seen in the economic recovery is inequality on steroids. The market is giving wealthy people a very good run."

National Jobs for All Coalition

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