As a follow-up on Tuesday's post on how American workers have fallen behind during the current recovery, I have below summarized the statistics for how the overall economy as well as corporate profits and labor income fared during the recoveries from the 3 deepest slumps in post-World War II America, the ones in 1973-75, 1981-82 and 2007-09 (Source the Bureau of Economic Analysis interactive database):
1) Q1 1975 to Q2 1977
Real increase in per capita national income: 9.5%
Real increase in per capita corporate profits: 45.9%
Real increase in per capita labor income: 7.9%
2) Q4 1982 to Q1 1985
Real increase in per capita national income: 14.8%
Real increase in per capita corporate profits: 45.8%
Real increase in per capita labor income: 10.5%
3) Q2 2009 to Q3 2011
Real increase in per capita national income: 4.6%
Real increase in per capita corporate profits: 46.8%
Real increase in per capita labor income: -1.0%
As you can see the most recent recovery stands out in two respects: both that it was far weaker than the other two and that the relative gain in corporate profits compared to labor income has been far greater. Growth has been less than half of that in the 1975-77 recovery and less than a third of that in the 1983-85 recovery. Meanwhile, corporate profits gained more than 48% compared to labor income in this recovery, compared to a 35% relative gain in the 1975-77 recovery and a 32% relative gain in the 1983-85 recovery.
The irony is here that under a left-wing President pursuing pursuing supposedly pro-worker policies, workers are far worse off both in relative but particularly absolute terms than under the more centrist Ford administration, and even worse both in relative but particularly absolute terms compared to the tax cutting Reagan administration. Shareholders have gained more or less the same during these three administrations in absolute terms, but have in relative terms gained the most during Obama because workers have seen their income continue to drop in contrast to the solid gains during particularly the Reagan administration.