Wages Relative To Profits Drop To All Time Low

Tyler Durden's picture

Getting paid miserable wages? Don't fret - just buy the stock of your (hopefully public) employer, and hope and pray that this time is different, and that light at the end of the tunnel is the not the next latest and greatest (and likely last) stock market collapse, in the ultimate trade off of current pay for capital gains: 19 quarters in and Labor Compensation is flat with where it was when the Great Financial Crisis began but, more crucially, employee compensation is at its lowest on record relative to corporate profits.

 

 

As we previously noted,

For those curious what the reason for records corporate profits is (or rather was: we have now finally turned the cycle and Y/Y profit growth is, for the first time since 2009, finally negative), the chart below explains it all.

 

It also explains why 401(k) plans are now redundant: anyone who wishes to keep up with the growth rate of their employer has no choice but to buy their stock, and generate returns for all shareholders. Because corporations, people or not, now have all the leverage.