More important, corporate profits as a share of the overall GDP have doubled, from roughly 5% in the 1980s to 10% in the 2010s, an all-time high. Corporate profits, then, must have taken a 5% chunk of the pie from someone else. Who do you think that was? Now compare this amount to the Mexico trade deficit, a paltry 0.5% of the GDP, and try not to snicker.
Here is an interesting thought. What if corporations redistributed their extra share of the pie back to their employees? In other words, turned back the clock. Kept their old 5% share. Behaved like they used to. What would be the impact on their profits? The math is easy. Their profits would be cut in half, to $950 billion, which is still nearly double what it was in 1988.
And what would be the impact of sharing the remaining $950 billion in excess income – industry’s false profits, if you will – with America’s working class? Astoundingly, this share of corporate profits, along with recouped taxes on those profits, would be enough to nearly double the income of the bottom half of all workers.
That’s right. The cumulative earnings of 84 million American wage-earners (50% of all workers) making less than the median income of $32,800 in 2018 was about 1.2 trillion dollars. This payout could be nearly doubled by the excess profits that corporations are paying to their shareholders instead of their workers. I am not suggesting that we should do this. I am just pointing out how much money there is and where it went. Not to the poor. And not to Mexico. It is still right here in the U.S., in corporate coffers.
From The Ailing Nation, Chapter Ten: Curiosity