Wage Growth and Profit Growth as Percent of US GDP

This graph shows the trends of wage growth and profits in relation to GDP. In recent years wages as a percent of GDP has declined. This is probably due to the rising costs of healthcare benefits as well as to slower growth in money income. Corporate profits in the last couple of years have risen to a high level as percent of GDP. Profits have grown faster than GDP. It would appear that the recent growth in profits is related to the decline in wages in that period. Corporations have been able to grow revenue with fewer workers.

Overall compensation which includes benefits, as well as non-cash income from stock options, has been more stable as a percent of GDP.