Justin Fox, Columnist

Corporate Profits Are Down, But Wages Are Up

As a share of GDP, companies are bringing in less while workers take home more.

September 1, 2019 at 1:30 PM UTC

Justin Fox is a Bloomberg Opinion columnist covering business, economics and other topics involving charts. A former editorial director of the Harvard Business Review, he is author of “The Myth of the Rational Market.”

Workers are bringing home more dollars.
Photographer: kaarsten/iStockphoto

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Early in the current economic expansion, after-tax corporate profits were setting record after record as a share of gross domestic product. The share going to wages and salaries, meanwhile, was at an all-time low (going back to 1929). This inspired some understandable hand-wringing, and a growing body of economic research on what exactly had been causing this seeming income shift from labor to capital.

Since 2012, though, the corporate profit share in the U.S. has been mostly falling: