The Commerce Department data released today on the nation’s Gross Domestic Product — which measures the overall size of the economy — indicate the continuation of a troubling trend for the country’s workers. The new data are for the third quarter of 2004 and show that a steadily dropping share of the nation’s income is going to wages and salaries. At the same time, data through the second quarter show that the share of GDP going to corporate profits has increased substantially. To a lesser degree, the share of GDP going to employer contributions to insurance and pensions has also risen.
· For the 14th straight quarter, the share of GDP that consists of wage and salary income fell. Such a decline is unprecedented during the post-World War II era. Previously, the share of GDP consisting of wage and salary income had never fallen for more than six quarters in a row.
· In the current period, the share of GDP going to wages and salaries fell from 49.5 percent in the first quarter of 2001 to 45.4 percent today, a dramatic reduction of 4.1 percentage points. (A percentage point of GDP is equivalent to $118 billion per year.)…
