In his Labor Day message assessing the State of the American Workforce, Secretary Reich argued that the economy's prosperity was bypassing most full-time workers.
Profits are up.
This is an important story that deserves a closer look. It is true that in both nominal and real terms recent corporate profits are at record levels. However, these record corporate profits come after more than a decade in which profits were severely depressed. As Figure 1 shows, the last time profits were near current real dollar levels was in 1979. In the face of depressed profits, and the need to invest in new plants, equipment, and technology to improve their global competitiveness, American companies borrowed heavily in the 1980s.