Economy

JP Morgan Investor Report: Huge Corporate Profits Resulted Directly From Reducing Wages And Benefits

As ThinkProgress previously reported, since 2009, 88 percent of income growth has gone to corporate profits, and only 1 percent has gone to wages. Now, a July 11 edition of Eyes On The Market, a JP Morgan investor report, finds that S&P 500 corporate profit margins increased by about 1.3 percent from 2000 to 2007, with profit margins reaching levels “not seen in decades.”

The JP Morgan analysis concludes that “reductions in wages and benefits explain the majority of the net improvement in margins.” The report includes graphs charting out these profit gains as compared to wages:



Note that the JP Morgan report explains this behavior taking place between 2000 and 2007, meaning that it began long before the Great Recession. Also note that the company ends this section of its report with a chilling conclusion: “As we have shown several times over the last two years, US labor compensation is now at a 50-year low relative to both company sales and US GDP.” (HT: @wonkmonk_)

Tags