U6 Watch is a monthly feature monitoring the success of the poverty-sustaining compromise of both political parties to use the U3 measure of unemployment. Read the first U6 Watch for more background. Other "recovery" news and labor market news is reported as well.
New data is in revising the basis of my frequent exasperation that corporate profits are at record highs, while wages and salaries are at record lows. I wasn't wrong, it's just that things are more extreme than we thought:
Before the figures were revised, it appeared that wages and salary income in 2012 amounted to 44 percent of G.D.P., the lowest at any time since 1929, which is as far back as the data goes.
But the revisions cut that to 42.6 percent, which matched the revised 2010 figure as the lowest ever.
Last month's U6 Watch discussed the declining labor force participation rate. An Urban Institute report (h/t) breaks down the components of the stagnating labor force participation rate, finding:The flip side of that is that corporate profits after taxes amounted to a record 9.7 percent of G.D.P. Each of the last three years has been higher than the earlier record high, of 9.1 percent, which was set in 1929.
We find that a deceleration in labor force entry rather than an acceleration in labor force exits had driven the decline in labor force participation. The decline in entry has been concentrated among women, particularly younger women. [emphasis added]From June to July, U3 and U6 unemployment actually moved in the same direction, both decreasing (7.6% to 7.4% and 14.3% to 14.0%, respectively). U6 unemployment is still nearly double U3 unemployment.