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The labor share of income in the US is at its lowest post-war level

libertystreeteconomics.newyorkfed.org

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Re: The labor share of income in the US is at its lowest post-war level

#11

Post by smt88 »

jagged-chisel wrote: post #5
scrumbledober wrote: post #3

it feels like every share of income is at its lowest except for the ultra wealthy.

The annoying/sad/infuriating thing is the ultra wealthy don’t have “income.” Technically, according to IRS rules, much of what they experience (housing, food, etc) should be classified as income. But their lawyers and accountants help them keep that looking quite low.

This report is only about wages, so even if the ultra-wealthy reported their real sources of income, they wouldn’t shut up as “labor” the way this defines it.

Re: The labor share of income in the US is at its lowest post-war level

#13

Post by jameslk »

The submitted title is a bit sensationalist given the article’s conclusion:

> Is this decline a distinct change from the recent behavior of the labor share in the U.S.? Along the two key dimensions we investigate, our answer is no. First, the labor share’s trajectory post-COVID broadly follows the cyclical patterns observed in earlier recessions, with a decline during the recovery phase that mirrors historical dynamics. Second, the decline in the labor share since COVID is driven primarily by within-industry changes rather than shifts in economic activity across sectors. Taken together, these results suggest that the post-COVID decline follows the same cyclical patterns as earlier recessions and is driven by the same within-industry forces, and they provide little evidence that it will evolve differently from past episodes.

What I find more interesting is the sharp drop around the early 2000s

Re: The labor share of income in the US is at its lowest post-war level

#14

Post by nimbius »

this is relatively unremarkable for those with an understanding of wage, labor, profit, price and capital.

capitalism will always seek to reduce labor cost. during the epoch of neoliberalism it achieved great strides in this by reducing labor power through union busting by both thatcher and reagan in the UK and US respectively. it has also effectively curtailed any increase in the minimum wage for nearly 20 years as well as reduced protections, regulation and prosecution for wage theft and overtime pay violations which it maintains as exclusively as civil matters while ensuring theft itself from a merchant in turn is always a criminal matter through the primacy of private property.

to learn more i recommend reading Marx's "Das Kapital," albeit its rather academic. Engels "wage labor" is also a good read to understand why housing is so persistently unaffortable but helps to understand why any other good or service slowly becomes so as well.

Re: The labor share of income in the US is at its lowest post-war level

#15

Post by mrtksn »

And yet for some reason all the algorithmic pricing targets the laborers, when apps hunt for whales they target teenagers. Ridiculous.

There is a need for proper pricing for the rich, i.e. Elon can pay a million dollars per meal. Someone is leaving money on the table.

Re: The labor share of income in the US is at its lowest post-war level

#18

Post by toomuchtodo »

Schiendelman wrote: post #8
jagged-chisel wrote: post #5

Earlier quoted context omitted.

The annoying/sad/infuriating thing is the ultra wealthy don’t have “income.” Technically, according to IRS rules, much of what they experience (housing, food, etc) should be classified as income. But their lawyers and accountants help them keep that looking quite low.

I used to think this - but when I talked to a tax lawyer friend and we walked through the steps they take, usually they're just deferring taxation that does end up getting paid by an entity eventually.

If they donate the wealth to their own foundation to continue to hold close and control, it doesn't get taxed. If they borrow against the wealth at low interest rates until they die and the basis is stepped up ("buy, borrow, die"), it doesn't get taxed. Certainly, deferment is a component, but there are obvious examples of the very wealthy operating in a manner to avoid taxes entirely when they're able to (realizing the benefit of the wealth without having to realize a taxable event). Trust stacking is a recent fad as well, although I don't have enough data to say whether it is a material concern from a tax revenue perspective.

Silicon Valley Is Obsessed with 'Trust Stacking,' and the IRS Doesn't Like It - https://news.ycombinator.com/item?id=48727963 - June 2026

Re: The labor share of income in the US is at its lowest post-war level

#19

Post by ck_one »

Schiendelman wrote: post #8
jagged-chisel wrote: post #5

Earlier quoted context omitted.

The annoying/sad/infuriating thing is the ultra wealthy don’t have “income.” Technically, according to IRS rules, much of what they experience (housing, food, etc) should be classified as income. But their lawyers and accountants help them keep that looking quite low.

I used to think this - but when I talked to a tax lawyer friend and we walked through the steps they take, usually they're just deferring taxation that does end up getting paid by an entity eventually.

Capital gains tax is clearly lower than income tax. So why did you change your mind?
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