Corporate America has best quarter in US history as real unemployment rate soars

By Stephen C. Webster
Tuesday, November 23, 2010 13:47 EDT
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Even amid the most turbulent economic conditions since the Great Depression, US corporate profits are at an all time high, according to a Tuesday report [PDF link] by the US Bureau of Economic Analysis.

At the same time, America’s poor and middle classes are under siege, with a mostly stagnant job market that has shown only marginal signs of improvement.

In spite of meager growth in some sectors, the real unemployment rate remains high, at approximately 1 in 5 Americans.

Yet for seven fiscal quarters running — since President Obama’s election — American corporate profits have shown strong growth.

According to a New York Times analysis, Q3 2010 saw the largest corporate profits in recorded US history, at $1.66 trillion.

The official unemployment rate from the Department of Labor Statistics was nine percent at time of this writing, but another statistic provided by the government, which includes underemployed persons, sat at 17.5 percent in October.

Outside measurements taken in July found that approximately 22 percent of US households had at least one member looking for full-time employment.

But for the wealthy, the best third quarter in history was driven mainly by consumer spending and steadily rising inflation. The Times noted that wages were also slightly up in Q3, which was seen as likely to boost consumer spending during the holidays.

A July report [PDF link] by the Center on Budget and Policy Priorities found that the income disparity between rich and poor in America is at its widest in over 80 years.

The top 1 percent of households in the US have seen a 281 percent rise in after-tax income since 1979, the center found. Meanwhile, the bottom fifth of American earners have seen only a 16 percent increase since 1979: a percentage which doesn’t account for value lost due to inflation.

According to inflation calculations by the Bureau of Labor Statistics, it would take $75,313.71 of today’s money to match the buying power of just $25,000 in 1979.

“The benefits of America’s economic growth since then have mostly gone to a wealthy minority, while the majority of workers have seen their earnings stagnate at best and decline at worst,” writer Chris Farrell noted recently, opining for Business Week. “The long-term trend is toward a small group of financiers, chief executives, professional athletes, entertainers, and other earnings titans pocketing much of the wealth generated by society.”

Stephen C. Webster
Stephen C. Webster
Stephen C. Webster is the senior editor of Raw Story, and is based out of Austin, Texas. He previously worked as the associate editor of The Lone Star Iconoclast in Crawford, Texas, where he covered state politics and the peace movement’s resurgence at the start of the Iraq war. Webster has also contributed to publications such as True/Slant, Austin Monthly, The Dallas Business Journal, The Dallas Morning News, Fort Worth Weekly, The News Connection and others. Follow him on Twitter at @StephenCWebster.
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