At the end of last month, Statistics Canada released corporate profit data for the second quarter of 2022. The data is for the country as a whole; it’s not broken down by province.
In the second quarter of 2022, corporate profits after taxes was $551.96 billion. This is an increase of $49.41 billion (or 9.83%) over the previous quarter and an increase of $100.97 billion (22.39%) over the previous year.
Here’s how corporate profits changed during each second quarter over the last decade.
And as a percentage.
I find it quite intriguing that even though corporate profits declined during the first year of the pandemic, the decline—both in absolute billions of dollars and in percentages—was nowhere as large as what we saw in 2015.
Even if you combine the losses in both 2019 and 2020, it’s a smaller loss than was seen in 2015.
Which makes it all the more surprising that profits saw their largest jump during the past decade in the second year of the pandemic.
Not only was it the largest jump, but it was more than twice as large as the previous high set in 2017—in terms of absolute billions of dollars—but it was nearly twice as large in terms of percentage, too.
Not only that, but if we add up all the changes in profits prior to 2020, it adds up to $18.54 billion. Even if we exclude all the losses, the combined increases still total $161.88 billion, which is less than what was saw in just 2021 alone.
And the second quarter of 2022 tacked on more than $100 billion, for a total of just shy of $270 billion.
Corporate profits definitely haven’t been hurting the last couple of year. At least not when looked at as aggregate data.
But that made me wonder. If corporations are making so much money, surely wages must have skyrocketed, too, right?
Funny thing is that quarterly compensation data tracked by Statistics Canada also happened to have been updated the same day.
Keep in mind that this, too, is aggregate data. It’s not broken down by province, and it’s total compensation paid out, not average hourly wage, average weekly wage, or anything like that.
In the second quarter of 2022, corporations paid out $1.192 trillion in total compensation. That was up by $22.176 billion over the first quarter, or 1.9%, and $116.72 billion (or 10.86%) over the previous second quarter.
Here’s a chart showing the annual change in compensation in each second quarter over the last 10 years.
And here it is annual change as a percentage.
What’s interesting this time around is that if you add up all the second quarters up to and including 2022, we get a total increase of $141 billion, which is more than what was seen between 2021 and 2022, the opposite of what we saw with corporate profits.
Now, watch what happens when we compare the annual change profits and wages over the last 10 second quarters.
Of the last 10 second quarters, in 6 of them, profits increased by a larger percentage than total employee compensation. And the gap between the two is pretty intense a few times.
For example, last year, profits increased at 3 times the rate that wages did and this year, they increased twice as fast. In 2017, they increased almost 7 times as much.
To be fair, they also tanked more than wages did, but that happened only 3 times.
Also, between the second quarter of 2012 and the second quarter of 2022, total corporate profits after taxes increased by 83.16%. Total employee compensation during the same period increased 49.69%.
Now wonder there seems to be an increased interest in unionization in Canada recently.