Corporate Profits Recover as Individuals Struggle

While corporate profits are recovering nicely, wages and salaries are stagnant. Check out recent posts at the Curious Capitalist here and Freakonomics here about how the current economic recovery strongly favors corporations and stockholders. The posts are based on this study from Northeastern University. The Great Recession differs greatly from recessions of the past, as does the current recovery.

To date, through the first quarter of 2011, the nation’s recovery from the 2007-2009 recession is both a jobless and a wageless recovery. (p. 23)

And here is a table comparing the current recovery to previous ones. (click to enlarge)

Center for Labor Market Studies, Northeastern University (p. 20)

 Hopefully, the recovery of jobs and wages will come with time, but how long this lag will be is debatable. Keep in mind, this recession was largely due to the sub-prime mortgage crash  - and resulting drop in home values - which is very different from prior recessions.