KANSAS CITY, Mo. – The share of national income that went to wages and salaries in the first half of 2006 was at its lowest level since such records began being kept by the Department of Commerce in 1929.

In contrast, the share of national income that went to corporate profits was at its highest level since 1950.

In the first half of 2006, 51.8 percent of total national income went to wages and salaries and 13.6 percent went to corporate profits, according to an analysis by the Center on Budget and Policy Priorities.

The center’s report also noted that since 2001, wages and salaries have grown at a 2 percent average annual rate, adjusted for inflation. Meanwhile, corporate profits have grown at a 13.7 percent average annual rate, adjusted for inflation.

The report looked at whether wage stagnation was caused by the higher costs of total compensation, given that employers are shouldering higher costs for employee health-care and pension benefits.

It determined that the average annual growth rate of total employee compensation, adjusted for inflation, has been 2.6 percent since 2001.

Also, the report said, the share of national income going to total employee compensation in the first half of 2006 was 64.2 percent, its lowest level since 1968, except for 1997.

The report said employment and hourly wage data for the first half of 2006 showed strong wage and salary growth for high-income workers, but real hourly wages stagnated for nonsupervisory workers (about 80 percent of the work force).

The center’s analysis reflects recently released Census Bureau data, which showed that median income among non-elderly households fell every year from 2001 through 2005.

“The benefits of rapid growth in corporate profits tend to accrue largely to high-income households, since they hold a highly disproportionate share of corporate stock,” the center’s report said. “Middle- and lower-income households typically are much more heavily dependent on wage and salary income.”

The full report is accessible at www.cbpp.org.

(c) 2006, The Kansas City Star.

Visit The Star Web edition on the World Wide Web at http://www.kcstar.com/

Distributed by McClatchy-Tribune Information Services.

AP-NY-10-12-06 1836EDT

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.