We all know how this "recovery" has been a jobless "recovery" with approximately 12.3 million American workers still out of work four years into the "recovery". (there, I got to use the word "recovery" three times in one sentence!)
That said, how are bottom lines looking for the corporations that should be creating the jobs that would ultimately help reduce the unemployment rate? Here's a graph from FRED showing the growth in after-tax corporate profits since 1947:
Other than that rather painful blip during the most recent incarnation of a recession, the growth in corporate profits has risen very steeply since the mid-2000s.
Here are some numbers:
At the beginning of 2002, after-tax corporate profits were $505 billion.
In mid-2007, after-tax corporate profits were $1307.5 billion. That's an increase of 159 percent in just over five years.
In mid-2008, after-tax corporate profits fell to a low of $643.7 billion during the Great Recession.
In mid-2012, after-tax corporate profits were $1742 billion. That's an increase of 171 percent in four years and, over the 10 year period from the previous peak in mid-2007, its a still a respectable increase of 33 percent over a five year period even when the Great Recession profit retrenchment is included.
Now, let's look at total non-farm employment back to 1947:
It looks great until you notice how the growth in the number of jobs seems to have plateaued just before the recession of 2001 after four decades of pretty steady growth with very little retrenchment during and after recessions during the 1970s, 1980s and 1990s.
Let's zoom in a little closer and look at the data over the past 10 years:
Now, let's look at the total number of non-farm employees for roughly the same periods of time as we looked at corporate profits and compare growth levels.
At the beginning of 2002, there were 130.68 million non-farm employees.
At the beginning of 2008, there were 138.056 million non-farm employees. That's a growth rate of 7.4 percent over 6 years. Remember, corporate profits grew at 159 percent over roughly the same time frame.
In mid-2010, the number of non-farm employees had dropped to a low of 129.32 million as the full impact of the Great Recession was felt.
At the beginning of 2013, the number of non-farm employees had risen to 134.825 million, an increase of 3.8 percent from the low point just after the Great Recession. Keep in mind that, since the depths of the Great Recession, corporate profits have risen by 171 percent from their low point.
Remember these statistics the next time that someone in power tells you that we need to lower corporate taxes to encourage job creation. It seems that American multinational companies really aren't interested in creating jobs, at least not in the United States as shown here:
One thing you can say for certainty about lower corporate taxes is that they will lead to higher after-tax profits. On that, you can safely bet. The relationship between corporate profits and job creation looks certain as well, just not in a way that benefits American workers.