Skip to content

Raw data: profit vs. personal income in the United States, 1980-2022

Published on 28 Comments on Raw data: profit vs. personal income in the United States, 1980-2022

I don't have any special reason for posting this. It just seems like something we should all be reminded of from time to time.

28 thoughts on “Raw data: profit vs. personal income in the United States, 1980-2022”

  1. tigersharktoo

    Interesting. But not a surprise. Would interesting if you could break it out by income decile. Might look even worse.

    1. cmayo

      It would, because those corporate profits eventually get turned into executive and shareholder compensation more so than increased earnings for lower deciles/quintiles.

      I'd also be curious to see this going back even further than 1980. Say, 1947 when FRED data starts for GDP.

      1. skeptonomist

        There is lots of data on income inequality, and lots of pieces on it. Just Google it. But one thing that almost all economic writers do wrong, including Kevin, is start at 1980. The inequality really started about 1973, when real wages started falling badly:

        https://skeptometrics.org/BLS_B8_Min_Pov.png

        Inequality had been decreasing from the early 30's up till then, and wages had been keeping up with GDP/capita (productivity) all through American history. Most of the increase in GDP since 1973 has gone to the very highest incomes, who of course are the ones who get the benefits of profits.

  2. golack

    making up for lost time?
    😉

    As you've pointed out before, the share of GDP going to the workers drops and productivity goes up....while the capital laughs all the way to the bank....

    Typically under Democratic presidents everyone does better than under Republican presidents. The only difference is that the wage gap narrows (or at least slows its expansion)--and we can't have that!

    1. MF

      Um... shouldn't the share of GDP going to workers drop and to capital increase as productivity goes up?

      Workers today are not working more hours than previously and the quality of their education does not seem to have increased - it may have decreased.

      Increases in productivity are mainly due to capital - to more and better tech. For example, productivity at supermarkets is up because of self checkout. Should the benefits go to check out workers or to capital? Some should go to workers - the person who manages a bank of 10 automated checkout kiosks does a more difficult and complicated job than an ordinary checkout worker, but most of it should go to the capital that paid for those checkout kiosks.

      1. nikos redux

        Self checkout kiosks are not labor saving, they are labor diverting.
        The "productivity" gains should accrue to Us, the customers now doing the work.

        1. Austin

          Don’t worry. In the future, when capital has perfected 3D printing machines and self driving cars so that there are no workers at all, just consumers doing all the work themselves of fetching new raw material in the cars and loading that new material into the printers, MF will pop up with a comment like “but capital deserves 100% of GDP because they created and own all the cars and printers on long term leases to the consumers.” And then MF’s dream of bringing back slavery-in-all-but-name will be complete.

    1. rick_jones

      While Kevin picked the last year of the Carter administration for his starting point, I rather doubt that was when “things” started.

      1. golack

        Actually, yes it was on many levels. That's not to say the right weren't advocating this effect beforehand, but it was only with Reagan that policies were implemented.

        now in the right place--editing functions is nice to have...

        1. rick_jones

          Then I’d like to see Kevin take that chart back to 1960 so as to cover the start of the undoing of the highest marginal tax rates and such.

  4. Adam Strange

    In my opinion, this is the major problem of our time. Corporations and the top income groups are sweeping up all the money, and the rest of the nation is facing stagnant wages, debt, and unemployment.
    If you want to understand why a large percentage of the population is seething with resentment and wants to radically change the government, this is it.

    1. bouncing_b

      I think climate change is "the major problem of our time" because it is existential and unrecoverable after a certain point (that may already have come).

      But inequality makes it so much harder to deal with climate change for exactly the reason you say.

      1. Austin

        If we can’t deal with the inequality problem which “only” asks for some Americans to redistribute their wealth to help out other Americans, you can give up entirely on the dealing with the climate change problem which asks for all Americans to redistribute their wealth to help out non-Americans and non-human creatures.

        We aren’t willing to even help our fellow citizens - there’s less than zero chance we’re gonna do so for people halfway around the world or for animals that aren’t adorable enough to be featured on greeting cards.

        1. skeptonomist

          The reason that Republicans keep winning elections and passing tax and other policies which favor the rich is because they get votes from wage-earning whites by standing for racism. The influence of racism and religiosity is the main problem, not the failure of plutocrats to be altruistic. Plutocrats may give away a fraction of their money, but they will never give up their power, or favor increasing wages.

    2. megarajusticemachine

      Imagine if even 25% of those growing profits "trickled down" (ha ha) into people's wages, just 25%!

    3. skeptonomist

      A large fraction of the population - the ones who voted for Trump - are not really seething with resentment about economic inequality. If they were they wouldn't vote for Republicans. They are seething with resentment or fear about the end of White Christian Supremacy (which is what "wokeism" means). This is probably the main cause of the increasing inequality, as Republicans switched on racism starting around 1965 and got votes for their plutocratic economic policies from lower-income whites who formerly voted Democratic on economic grounds.

  5. Pingback: Corporate profit vs. Personal income, US 1980-2022, adjusted for inflation | Later On

  7. AbolishFederalIncomeTaxes

    This goes directly to Piketty's argument that r > g. The only way for labor to take advantage of ever increasing corporate profits is to own stocks. Great if you're in a salary job with a 401K and matching contributions. But even that is eroding. Without some sort of more aggressive taxation, the money will continue to bubble up to the top.

  8. Owns 9 Fedoras

    Is that inflation-corrected? I wouldn't expect a big change except that both trend lines would take like a 5 degree tilt clockwise, profits more nearly flat and wages incrementally lower.

  9. skeptonomist

    Wages generally kept up with GDP/capita (a measure of productivity) in the US since earliest times, until about 1973:

    https://skeptometrics.org/WageIndex.png

    Wages are from here:

    https://eh.net/database/unskilled-wage-index-u-s/

    The reason that productivity increased is because machines replaced men and animals. The reason that things when bad for wage-earners around 1973 is not because of mechanization or automation, which had been going on for centuries, it is because of a political move to the right which reversed the New Deal and the Great Society, and also because of international competition in wages, that is globalization.

  11. Pingback: American economy still under the sway of Reagan’s transformative presidency – democratic impasse.com

Comments are closed.