Beyond Corporate Profits: TV Talking Heads Miss Loss of Small Business Income
Among television talking heads on stations like CNBC and Fox Business, the health of business tends to be measured only by corporate profits. That’s understandable given that these venues focus on the performance of stocks and bonds being traded in the public markets. And of course, corporate profits matter.
But there’s a lot more to the well-being and profitability of American business than just corporate profits. Almost always ignored is proprietors’ income, which is the income of sole proprietorships and partnerships, along with tax-exempt cooperatives.
Before the recent recession, annual corporate profits and nonfarm proprietors’ income both hit highs in 2006, and subsequently took dives. Corporate profits fell by 22.4 percent from 2006 to 2008. Proprietors’ income declined by 14.9 percent from 2006 to 2009.
The dichotomy since then, however, has been stark and troubling.
Corporate profits in the first quarter of 2013 registered $1,985 billion (annual rate). That was up by 23.4 percent compared to their 2006 level of $1,608.3 billion.
Meanwhile, proprietors’ income in the first quarter came in at $1,186.9 billion. That was up by a mere 7.5 percent versus the 2006 level of $1,103.6. Adjust the numbers for inflation, and real proprietors’ income over this period declined by about five percent.
So, in real terms, the income of a huge portion of American business has failed to return to 2006 levels.
Wonder why the U.S. economy has been suffering through one of the worst recoveries on record, while corporate profits have rebounded? Well, the decline of proprietors’ income over a period of six-plus years is a significant part of the answer.
Raymond J. Keating is chief economist for a national small business organization; a weekly columnist with Long Island Business News; a former Newsday weekly columnist; and an adjunct professor in the MBA program at the Townsend School of Business at Dowling College.
Author of numerous books, his latest business and policy books are “Chuck” vs. the Business World: Business Tips on TV and Unleashing Small Business Through IP: Protecting Intellectual Property, Driving Entrepreneurship. Keating also is a novelist, penning a series of Pastor Stephen Grant thrillers.
His articles have appeared in a wide range of additional periodicals, including The New York Times, The Wall Street Journal, The Washington Post, New York Post, Los Angeles Daily News, The Boston Globe, National Review, The Washington Times, Investor’s Business Daily, New York Daily News, Detroit Free Press, Chicago Tribune, Providence Journal Bulletin, and Cincinnati Enquirer.
Trending Now on Affluent Christian Investor
Those Who Choose Security Over Liberty Deserve Neither – And Will Get Neither
Social Security Won’t Go Bankrupt — It Will Just Cut Your Benefits!
Joe Biden And Even Many Top GOP Officials Have Major Ties To Chinese Money
Another Billionaire Bites The Invisible Hand That Feeds Him
There Are Two Americas
Tucker Joins Bernie And AOC In Attacking Free Market System Again
Illegal Immigration Fight Is About Election Fraud – Not Racism
Founding Fathers’ Plan: Governments Compete Over Us
Conservative Arguments Against Huawei Contradict What Conservatives Used To Believe
Socialism Is Not About Sharing – It’s About Killing
What This Washington Post Journalist Learned After 544 Days In An Iranian Prison
When The Fed Creates Money, Who Gets It?
Universal Basic Income Has Already Been Tried: Here’s What Happened
How I Nailed The May Payroll Bust
The Most Important Politician of the 20th Century Who Wasn’t a President
The Theology Of The Liberty Bell
How Christian Individualism Rebuilt The World Economy After WWII
Follow Us
The Affluent Mix
Those Who Choose Security Over Liberty Deserve Neither – And Will Get Neither... June 17, 2019 | Jim Huntzinger
Social Security Won’t Go Bankrupt — It Will Just Cut Your Benefits!... June 17, 2019 | Daniel McLaughlin
There Are Two Americas June 17, 2019 | Frank Vernuccio
Biblical Economics & Finance: Balancing Investment & Consumption... June 17, 2019 | Jerry Bowyer
Illegal Immigration Fight Is About Election Fraud – Not Racism... June 14, 2019 | Frank Vernuccio
New York’s Disastrous Single-Payer Healthcare Plan... June 14, 2019 | Daniel McLaughlin
Biblical Economics & Finance: An Introduction To Wealth... June 14, 2019 | Jerry Bowyer
How Christian Individualism Rebuilt The World Economy After WWII... June 14, 2019 | Jim Huntzinger
How I Nailed The May Payroll Bust June 14, 2019 | David Goldman
When The Fed Creates Money, Who Gets It? June 14, 2019 | Roger McKinney
Tucker Joins Bernie And AOC In Attacking Free Market System Again... June 3, 2019 | Roger McKinney
The Managers Who Rebuilt After WWII Understood Why Government Is A Growth Drag... June 3, 2019 | Jim Huntzinger
We’re Called Not To Reflect, But To Refract Him In The Marketplace... June 3, 2019 | Kevin Cullis
Conservative Arguments Against Huawei Contradict What Conservatives Used To Beli... June 3, 2019 | John Tamny
Another Billionaire Bites The Invisible Hand That Feeds Him... May 28, 2019 | Roger McKinney
Joe Biden And Even Many Top GOP Officials Have Major Ties To Chinese Money... May 28, 2019 | Frank Vernuccio
What Does Jesus Teach About Investing? May 28, 2019 | Jerry Bowyer
AOC’s Green New Deal Worked, It Shifted The Overton Window... May 28, 2019 | Daniel McLaughlin
John The Baptist’s Warning To Greedy Government... May 28, 2019 | Kevin Cullis
The Theology Of The Liberty Bell May 28, 2019 | Jim Huntzinger
Universal Basic Income Has Already Been Tried: Here’s What Happened... May 20, 2019 | Frank Vernuccio
Higher Education Doesn’t Cause Higher Earnings... May 20, 2019 | Daniel McLaughlin
Join the conversation!
We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse.