Workers have been falling behind dramatically in the tug of war between capital and labor, stoking serious concern about the trust holding the economy and society together.
Diane Swonk, chief economist and managing director at KPMG, highlighted troubling data on corporate versus workers’ earnings that were included in a report she recently authored.
It showed corporate profits as a share of U.S. GDP have soared to 15.85% from 8% in 1982. By contrast, employee compensation as a share of GDP has tumbled to 61.9% from 66.6% in 1982.
While labor’s slice of the economy has previously been lower than it is today, the overall trend line has pointed down, and the gap compared with corporate earnings is now at a post–World War II record high.
“This chart from my recent Economic Compass still haunts me,” Swonk said in a social media post last week. “A friend refers to it as the ‘revolution chart,’ which [is] disturbing but telling. Inequality fuels social and economic instability.”
