The New York Times put it bluntly in an article on high corporate profits this week: "With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers."
“So far in this recovery, corporations have captured an unusually high share of the income gains,” Ethan Harris, co-head of global economics at Bank of America Merrill Lynch, told the Times. “The U.S. corporate sector is in a lot better health than the overall economy.”
While the U.S. unemployment rate has been stuck at about 8 percent, worker productivity has increased as corporations have demanded more of employees and more work has gone overseas. The Dow Jones set a record high on Tuesday.
According to the Times, "As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966."
Is the lack of hiring intentional or does it result from uncertainty about the economy? Either way, how do you feel about it?
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