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A recent study by the Center for Labor Market Studies at Northeastern University in Boston illustrates the impressive productivity gains made by this country’s workers and how they have been ignored when it comes to compensation.

Between 2000 and 2006, labor productivity in the non-farm sector of the economy rose by an impressive 18 percent. But workers received very little compensation for that remarkable effort as their inflation-adjusted weekly wages increased by just 1 percent. That equates to $3.20 a week.

The combined real annual earnings from 2000 to 2006 for the 93 million production and non-supervisory workers (exclusive of farmworkers) in the United States rose by $15.4 billion.

Meanwhile, the top five Wall Street firms (Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley) were expected to dole out an estimated $36 billion to $44 billion worth of bonuses to their 173,000 employees. While the average payout was expected to be between $208,000 and $254,000, the bulk of the gains were going to be presented to the top 1,000 or so highest-paid managers.

These numbers were only the tip of the iceberg. The chairman and chief executive of Home Depot, Robert L. Nardelli, was slipped $210 million with his pink slip and golden parachute, Morgan Stanley’s John Mack got stock and options worth in excess of $40 million, and Lloyd Blankfein at Goldman Sachs fared even better with his $53.4 million package.

According to Andrew Sum, director of the Center for Labor Market Studies, the system will remain unfair as long as the corporate elite control it and use it toward their own ends.

He claims that the pervasive unfairness in how the wealth of this country is distributed is an insidious disease eating away at the structure of the society and undermining its future. The middle class is hurting under the weight of personal debt. The safety net is disappearing. The savings rate has dropped to below zero.

Supporting data from two separate sources reveal just how skewed the distribution of economic growth has been over the current recovery. 

The Bureau of Economic Analysis released the third quarter report of 2006, which shows that a historically high share of corporate income is going into profits and interest (i.e., capital income) rather than employee compensation.  And an analysis of household incomes just released from the Congressional Budget Office (CBO) shows that a greater share of this capital income is going to the richest households – more than at any time since the CBO began tracking such trends.