Pay failing to keep pace with corporate profit

LOS ANGELES -- US companies are about to wrap their fourth consecutive year of spectacular profit growth, filling corporate coffers with cash and keeping the bull market alive on Wall Street.

Total earnings of the blue-chip Standard & Poor's 500 companies have risen at double-digit percentage rates for 18 consecutive quarters, an unprecedented streak.

But to many rank-and-file workers, the booming bottom line may only serve as a reminder of what has been missing from their own paychecks.

Wages of average workers have just begun to improve recently after badly lagging inflation for most of this decade. Amid the surge in corporate profit, many workers have faced terminated pension plans, reduced healthcare benefits, and rising outsourcing of jobs.

The swelling earnings of business -- and of many top executives -- have become part of the debate about widening disparities in US incomes. When they take control of Congress next month, Democrats will focus intently on those disparities, they say, and on trade agreements that some contend enrich multinational businesses while destroying American jobs.

One measure of the split between what employees get and what business retains shows up in national income accounts calculated by the Commerce Department.

Corporate earnings generated in the United States totaled $1.42 trillion at an annualized rate in the third quarter, or 10.7 percent of the economy's gross domestic income, government data show. That was the highest share of income that companies claimed since the 1960s and was up from 6.2 percent at the end of 2000.

By contrast, total labor compensation accounted for 56.4 percent of gross domestic income in the period. That percentage has fallen from 58.4 percent in the fourth quarter of 2000 and has been in general decline since the early 1980s.