Companies Not Sharing in the 'Recovery' with Workers

Who's holding back the economic recovery? Corporate America itself, which is sitting on nearly $2 trillion in unspent money, according to a sobering report from the Wall Street Journal.

The Journal studied the first 18 months of every economic recovery since World War II and found that companies today, unlike earlier decades, are barely sharing any of the profits they've pocketed through workers' productivity gains.

In the economic recoveries stretching back to 1949, the Journal found that companies shared an average of 58 percent of the profits that they gained through increased productivity.

Today, even though productivity jumped more than 5 percent from mid-2009 to the end of 2010, companies are sharing almost none of it with workers. In return for workers' productivity gains for that period, companies gave workers a three-tenths of a percent wage increase (0.3%). In earlier recoveries, that productivity gain would have netted workers a 3 percent wage boost.

Companies aren't spending much of their money on hiring, but are giving it to shareholders, buying back their stock, and simply letting it sit.

"Why the difference between this recovery and its predecessors?" asked Washington Post columnist Harold Meyerson. "It's happening at a time when the entire private sector workforce is non-union — 93.1 percent. Absent unions, workers are dependent entirely on management’s willingness to share their increased revenue with employees...and apparently, no such willingness exists."