Wage and profit shares

The CCPA released a study today by PEF steering committee members Ellen Russell and Mathieu Dufour. Rising Profit Shares, Falling Wage Shares is the published version of research they presented during the PEF session on ineuquality, at the CEA conference. The full study is available here and the press release says:

Canada’s economy grew steadily and workers’ productivity improved by 51 per cent in the past 30 years, but workers’ average real wages have been stuck in a holding pattern all this time.

“Canadians are constantly being told they need to improve their productivity and grow the economy – which is exactly what they’ve done, but their paycheques aren’t growing to reflect their work effort,” says study co-author Ellen Russell, CCPA senior economist.

The study finds that Canadian workers’ wage share of national income is the lowest it’s been in 40 years. If workers’ real wages had increased to reflect improved productivity and economic growth, they could be earning an average of $10,000 more each year on their paycheques (in 2005 dollars).

Instead, corporations – not workers – have been banking the lion’s share of the benefits of economic growth and improved productivity.

“Corporate profit shares are the highest they’ve been in 40 years – and we’re not talking peanuts here,” says Russell. “In 2005, corporations banked $130 billion more in gross profits than they would have if the profit share had remained at 1991 levels. Sharing those earnings with workers could have gone a long way to reducing Canada’s growing income gap.”

Leave a Reply

Your email address will not be published.