CORPORATE PROFITS NEVER LOOKED BETTER, MIDDLE AMERICA NEVER WORSE

Paul Wiseman, AP Economics Writer, On Friday July 22, 2011, 6:36 pm EDT
http://finance.yahoo.com/news/A-boom-in-corporate-profits-a-apf-3135711604.html?x=0&sec=topStories&pos=2&asset=&ccode=
WASHINGTON (AP) -- Strong second-quarter earnings from McDonald's, General Electric and Caterpillar on Friday are just the latest proof that booming profits have allowed Corporate America to leave the Great Recession far behind.

But millions of ordinary Americans are stranded in a labor market that looks like it's still in recession. Unemployment is stuck at 9.2 percent, two years into what economists call a recovery. Job growth has been slow and wages stagnant.

"I've never seen labor markets this weak in 35 years of research," says Andrew Sum, director of the Center for Labor Market Studies at Northeastern University.
Wages and salaries accounted for just 1 percent of economic growth in the first 18 months after economists declared that the recession had ended in June 2009, according to Sum and other Northeastern researchers.

In the same period after the 2001 recession, wages and salaries accounted for 15 percent. They were 50 percent after the 1991-92 recession and 25 percent after the 1981-82 recession.
Corporate profits, by contrast, accounted for an unprecedented 88 percent of economic growth during those first 18 months. That's compared with 53 percent after the 2001 recession, nothing after the 1991-92 recession and 28 percent after the 1981-82 recession.

What's behind the disconnect between strong corporate profits and a weak labor market? Several factors:
-- U.S. corporations are expanding overseas, not so much at home."