The Flow of Capital

[Corporate] Profits have been so high because almost all of the benefits from productivity improvements are flowing to the owners of capital rather than to the workers.

While profits are up 21.3% in the past year, labor compensation is up just 5.5%. After adjusting for inflation, population growth and taxes, real disposable per capita incomes are up just 0.5% in the past year.

Rex Nutting, “Profits surge to 40-year high: when will corporations spend some of their bread?” MarketWatch, 3/30/06.