(FORTUNE Magazine) – You've heard it so often that it must be true: Greedy corporations are screwing employees--squeezing down wages while pumping up profits to record levels. Indeed, "corporate greed" has been so widely and roundly denounced that it became rhetorical raw meat in the Republican primaries this year, of all things. But as is often the case, the conventional wisdom about corporate greed is just plain wrong. The share of corporate revenue going to employees has in fact remained remarkably constant ever since World War II, while the share going to profits is actually low by postwar standards, as the chart above shows. True, profits have improved in recent years, but they were coming off a very weak base. What's more, economists predict that corporate earnings will slow dramatically in 1996, with retailers and some basic industries facing the most difficulties.

Hard-pressed consumers trying to stretch their last paycheck to meet their next credit card bill may find it easy to believe that corporate America is run by direct descendants of Ebenezer Scrooge. But to economists who've studied the data, the "greed" charge is simply a nonstarter. "The fact is that over a long period of time, workers have received about the same share of the corporate pie," says labor economist Audrey Freedman, a consultant in New York City. According to Commerce Department figures, corporations in the 1990s have paid out some 65% of revenue to employees in wages and fringe benefits, slightly more than in the halcyon 1950s and 1960s, when no one worried about declining living standards. Meanwhile, after-tax profits in the 1990s have tumbled to 6% of revenue, down from 8% in the Seventies, 9% in the Sixties, and more than 10% in the Fifties. Profitability has fallen in part because companies today are more highly leveraged than in earlier decades, so they pay out more in interest. Another reason is that depreciation charges are higher because companies invest more heavily in short-lived equipment like computers. But the money going to interest and depreciation has not come out of employee compensation. "The income shares aren't shifting," says David Wyss, chief financial economist at consulting firm DRI/McGraw-Hill. "Companies aren't any greedier than in the past."

So why does the corporate greed rhetoric resonate so well, and why are people from all parts of the political spectrum so ready to give it credence? For one thing, it's true that after-tax corporate profits from domestic operations rose at double-digit rates in each of the past four years, to a little over $300 billion in 1995, as the economy found new life and interest rates declined. But the surge followed a dozen years over which earnings were rotten--and weren't even growing fast enough to keep pace with inflation. It's also true that in 1994 and 1995 corporations constrained compensation to a little under 65% of revenue for the first time in many years, the result of all those angst-inducing business practices--like layoffs, outsourcing, temp hiring, and skinflint pay increases. But it wasn't much of a move, and labor's share of the pie could easily inch back up this year as the tepid economy restrains revenue growth. Besides, worries over falling living standards predate the recent string of profit gains. Recall the voter anxiety that undermined George Bush in 1992.

A key reason that corporate employees think they're getting shortchanged, suggests DRI's Wyss, is that compensation has increasingly been paid out as benefits rather than as take-home pay. Benefits have jumped from 4.4% of corporate revenue in the 1950s to 11.5% in the 1990s, Commerce Department numbers show. From a company viewpoint, those are significant cost increases. But for the employee, they may not represent a commensurate increase in value: Are people happier with their health insurance now than they were 20 years ago, when today's plans increasingly limit their choice of doctors?

And few workers probably appreciate how hard federal programs hit at company coffers, siphoning off funds that would otherwise be available for wages. Corporate contributions for Social Security and Medicare climbed from $12 billion in 1966, when Medicare began, to more than $200 billion last year, doubling the share of revenue absorbed to 5%. People don't feel better off when taxes for those programs rise, even if they do know that their companies are kicking in a larger share. "It's not encroachment by business that's the employee's problem," says Wyss. "It's encroachment by government."

But surely it's true, as the corporate-greed crowd charges, that workers aren't reaping the benefits from rising productivity? Wrong again. Douglas Lee, chief economist of HSBC Washington Analysis, argues that business is lifting compensation nearly as much as productivity gains permit. The trouble is that costs of services produced outside the corporate sector, like rent and school tuition, are rising faster than prices of goods and services produced by corporate workers. Government is a culprit here again, notes Lee. For example, property taxes, water and sewer fees, and public transportation charges--all part of the consumer price index--are rising relatively quickly, squeezing workers' incomes.

The most fundamental problem for corporate workers, however, is that the economic pie just isn't growing the way it did in the immediate postwar decades. Back then, workers didn't care that their share of the pie wasn't increasing, because the pie itself kept getting bigger fast. Says labor economist Audrey Freedman: "Corporations made oligopoly profits, and unions helped dole them out." No more, of course. Deregulation and intensifying global competition have seen to that, contributing to the woes of people working at big companies. Yet even though wages stagnated during the past two decades, the image lingers of perpetual, robust real income gains for everyone carrying a briefcase or a lunch box.

Wages might make a little headway this year as the low unemployment rate forces companies to compete for workers. But even without that, economists expect unit labor costs to pick up, keeping profits growth in the low single digits. The reason is that productivity gains tend to slow down in the later stages of a business expansion, and this one is already older than average. Richard Rippe, chief economist at Prudential Securities, thinks profits could fall a bit from last year as companies find it difficult to raise prices in a slow-growth economy.

Retailers will suffer most, analysts say. Not only are customers worried about jobs and wages, they're also burdened by heavy debt. Retailers can blame themselves as well: They built too many stores, so in order to compete with the guy down the street, they have to discount like crazy. Other industries, too, could suffer from overexpansion. Output from new mini-mills will push steel prices--and profits--down, says analyst Charles Bradford of UBS Securities. Other industries, like wood products, will be hurt by the recent rise in long-term interest rates, which will undercut new-home construction.

Might a profits slowdown deflate the myth of the greedy corporation? Don't count on it. Corporations were put on this earth, after all, to make money, and to some minds, profit maximization will never seem all that different from greed. But profits, of course, pay for the latest equipment and technology that produce economic growth and more jobs. If corporations weren't greedy like that, they'd go out of business, and then we'd all be in trouble.

REPORTER ASSOCIATE Lenore Schiff