Al Jazeera, Economy Grows, Incomes Shrink: Americans Continue to Lose Money While Corporate Profits Soar, by David Cay Johnston (Syracuse):
The first data on 2013 incomes show continuing bad news for Americans, my analysis of a new Internal Revenue Service report shows. Average income fell 2.6 percent in 2013, even though the economy grew 3.2 percent in real terms over 2012. Average inflation-adjusted income in 2013 was 8 percent lower than in 2007, the last peak economic year, and 6.9 percent less than in 2000, the year President George W. Bush set as the standard to evaluate the effect of his tax cuts and regulatory policies.
This is the latest sign of a disturbing trend. An ever-shrinking share of national income flows to individuals while corporate profits expand. In fact, profits hit a record high in 2013 both in absolute terms and as a share of the economy. By both measures, profits have continued rising. By contrast, labor’s share of national income has been trending downward since 1980, except for a spike during the second term of President Bill Clinton. The decline accelerated after the Bush tax cuts took effect, retroactively, to the first day of 2001.
This redistribution of national income away from labor and toward capital flows from policies initiated by President Ronald Reagan and followed to varying degrees by every president since. ...
Total income reported by America’s almost 145 million taxpayers was $9.11 trillion, down seven-tenths of 1 percent from 2012 when measured in 2013 dollars. Average income fell by an even larger figure, 2.6 percent, because the number of taxpayers increased because of population growth.
Average income reported on tax returns in 2013 was $61,668, down from $63,297 in 2012 — a difference of $1,629 — my analysis of the latest IRS Statistics of Income report shows. Along with the startling decline in average income, average wages also fell, although the number of taxpayers reporting income from work grew by almost 2.8 million or 1.9 percent. The average wage declined $576, or 1.1 percent, to $53,797. ...
The news here, overall, is this: The American economy is getting bigger, but average incomes are shrinking. If that trend continues, it will eventually spell economic, social and political trouble for the country.