Evidence for the past couple of years into 2016 shows that employee wages have continued to grow while publicly traded companies have seen weak earnings. New York Times staffer Neil Irwin reports on this trend, which may or may not be sustainable.
At the start of 2013, 61% of national income went to worker pay and benefits, but by 2015, that rate had risen to 62.6%. Likewise, corporate profits’ share of national income has fallen, from 14.2% in the middle of 2014 to 12.1% by the end of 2015. Higher employee compensation is believed to be the reason for this swing:
Hiring has been quite strong over three years, with millions of Americans getting jobs. That has pushed the unemployment rate steadily downward, to about 5 percent. Very gradually, a labor market that was very much tilted in favor of employers is tilting the other way.