|OPINION AND COMMENT By Bob Weaver|
It's bad news for American workers, and its not just unemployment.
While working Americans have been losing ground with millions of jobs being exported to foreign countries, there have been big losses to wages and benefits.
Americans are working longer hours, holding more than one job, having benefits reduced and getting fewer vacation days.
Their health benefits are costing more and are being cut, and in many cases, just eliminated.
A US Commerce Department report says that the share of America's income constituting wages and salaries dropped again during the third quarter of 2004.
It has fallen 14 quarters in a row, three and a half years, the longest slide in recent history.
Since World War II, wages' share of the gross domestic product had never dropped more than six quarters in a row, until the 2000s.
The share of the nation's income going to corporate profits rose substantially, from 7.8 percent to 10.1 percent during the 13 quarters from early 2001, according to a report by the Center on Budget and Policy Priorities.
Also bad news for workers that include white-collar, middle-management and some professional groups.
While it's cause to celebrate for major stockholders and corporate CEOs in the short run, eventually it will be bad news for them, too.
In early 2001, wages and salaries were 49.5 percent of GDP.
During the latest quarter, they were only 45.4 percent. Each percentage point works out to about $118 billion a year.
Even if workers' share of the nation's income dropped, they still might be better off if the overall economy grew enough.
A narrower slice of pie could still be more if the overall pie increased.
But that's not the case, according to the Center on Budget and Policy Priorities. After adjusting for inflation, total wage and salary income rose modestly in 2003 and 2004, just enough to offset declines in 2001 and 2002. Real income is about the same as it was in early 2001.
While average families are facing paying for high gasoline, energy and insurance costs, they certainly are not making a gain.
Corporate profits grew 40 percent, even after adjusting for inflation.
During previous cycles of the same length, corporate profits grew by an average of 12 percent.
America now has 295 million people — families who must buy groceries, pay for housing, clothe their children and send them to school.
If workers receive a shrinking share of the nation's bounty, while corporations and investors reap more, ordinary folks must scrimp where they can, take fewer trips, buy fewer holiday gifts, have a tougher time saving for college and repairing their homes and vehicles.
They will buy fewer new toys and electronics they can live without.
Such belt-tightening crimps the economy.
Corporations cannot sell to people who cannot afford their goods, and that means leaner profits in the long run.
Business can cut only so many employees, so many pensions, so much health insurance and so much waste to make up the difference.
The U.S. economy simply works better when more people participate in it.
When wealth is spread among many hands, it gets spent on necessities as well as luxuries.
Wealth concentrated in corporate hands, instead of spent by average families in the process of living, has a stagnating effect on the marketplace.