In a report released today, Research Affiliates' head of investment management warns that corporate profits are dangerously high. The percent of income going to capital vs. labor is becoming intolerable, and the labor force isn't going to take it forever.

"The dramatic rise in income inequality is a direct consequence of this spectacular reallocation of income to capital and away from labor," says Chris Brightman in his essay, "The Profits Bubble."

What's this mean for investors?

"Expect real earnings per share to grow much more slowly, or even decline, over the next couple of decades," concludes Brightman. Labor, interest and tax expenses will rise much faster than sales. If Brightman turns out to be correct, stifled earnings growth could pressure equity prices downward and make it harder for corporations to compete and survive recessions. How U.S. investors, the markets and businesses would be affected is anyone's guess, but there's no doubt that such a scenario would create greater challenges for them.

To many investors, says Brightman, the idea that the United States may soon experiences decades of zero or negative earnings growth seems "preposterous," but the reality is there are many examples of such periods through economic history.

What has led to the upward surge in corporate profits that have grown so much faster than GDP and wages? Globalization over the last 25 years that's been politically encouraged, he says. With places like China, India and Russia joining the global economy, the labor force and populace quadrupled.

Brightman's arguments are well thought out and certainly seem plausible. To read his essay, click here.