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

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

#321

Post by otekengineering » Tue, Jun 30, 2026, 5:29 PM UTC

isn't this the expected/intended outcome of the economic policy we've held for a generation or two?

the capital/labor class gap increases when total returns on capital investment exceed total wages+redistribution to the labor class, and the gap shrinks when that's reversed. the market ~controls the capital gains and labor wages knobs, and society decides where to set the redistribution knob.

the article investigating the post-covid drop and concluding that it's normal is an interesting rhetorical device. on one hand, relief that nothing crazy is happening. on the other hand, disappointment that we've accepted a growing inequality gap as normal. the gap was already at a post-war max going into covid, the floor gave out 20 years earlier and covid was just gas on the fire.

advancements in automation and tax codes that benefit capex over payroll will continue to incentivize business to shift budgets from labor to robots.

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

#322

Post by Ekaros » Tue, Jun 30, 2026, 5:30 PM UTC

mancerayder wrote: post #306

Ekaros wrote: post #145

Earlier quoted context omitted.

From outside it doesn't look like not being paid enough. It looks like affordability problem. Prices in general are too high. Rents in general are part of this. Both for housing and commercial property. Somehow getting profit from both rent and appreciation is the goal of the system. Well that is what population voted for and choose not to overthrow system for so maybe they deserve it.

Underlying rent are other things going up - property taxes, input costs like labor and materials, and insurance. While we must be mindful of greed and abuse, we need to include all underlying costs before just assuming people are cranking up rents. I'm not a landlord but I own property and the costs are gotten vicious lately. Labor is expensive, materials are insane, energy costs, and now insurance are suffocating. A…

Energy is one variable. But have things gotten less efficient as things keep going up in prices? Is more labour needed to produce the same? There is stuff like regulation forcing more expensive things. But in general if there was efficiency gains things should keep the same price or drop. Somehow this isn't really happening very well.

But my thesis really is that these things are not underlying the rents. But rents are actually underlying these costs. And well in general the rent seeking economic process build on ever growing valuations of everything.

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

#323

Post by afc » Tue, Jun 30, 2026, 5:31 PM UTC

mc32 wrote: post #185

taeric wrote: post #108

Earlier quoted context omitted.

I'm going to go on a limb and say half of the US is not living in abject poverty? Nor can I get behind the idea that quality of life for folks is on the down trend.

Mississippi, the poorest state, has similar median income to Germany. I’m pretty sure 50% of the people there are not in abject poverty.

Per Wikipedia, in 2018:

* Median household income in Mississippi: $44,717

* Median wage in Germany: €5,370 per month, equals $73,565.

So even the individual median wage in Germany is more than 50% higher than the median household income in Mississippi.

Sources: https://en.wikipedia.org/wiki/List_of_European_countries_by_... and https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...

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

#324

Post by ToucanLoucan » Tue, Jun 30, 2026, 5:31 PM UTC

nradov wrote: post #309

ToucanLoucan wrote: post #246

Earlier quoted context omitted.

If you as a person are turned off of a career because you can only make a mere, paltry peasant wage of $300k per year, then I think that's really a you problem there. And as to your comments about shortages, we already have shortages.

Feel free to moralize all you like about the maximum wages other people should earn if that makes you feel better but that won't solve any of the actual problems. In the real world, most people respond to economic incentives. Shortages can always get worse. (I am not a physician.)

> In the real world, most people respond to economic incentives.

Then why is there a shortage? Are you telling me the $750,000 yearly compensation still isn't enough?

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

#325

Post by jmye » Tue, Jun 30, 2026, 5:33 PM UTC

autoexec wrote: post #206

wqaatwt wrote: post #67

Earlier quoted context omitted.

There are countries in Europe which have entirely privatized healthcare systems (not even medicare/medicaid equivalents). US tried adopting some of their practices with Obamacare and even that didn’t work out. Singlepayer isn’t really necessary to have a reasonably affordable and accessible healthcare system proper regulation is.

As successful as Obamacare has been it didn't really do much to lower the cost of healthcare or claw back the billions wasted to insurance company profits. There might be some kind of regulation just as effective as single payer, but we've never seen it anywhere in the US.

> As successful as Obamacare has been it didn't really do much to lower the cost of healthcare

It dramatically lowered the cost to consumers. Further, conflating overall healthcare spend with the portion of spend tied to a significantly lower-cost population is apples and oranges at best and represents a fundamental misunderstanding of healthcare cost in general. It's ok to not have opinions about things you know you don't understand.

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

#326

Post by scottyah » Tue, Jun 30, 2026, 5:34 PM UTC

idiotsecant wrote: post #298

scottyah wrote: post #232

Earlier quoted context omitted.

It hurts the definition of the words when you use ultra wealthy to refer to the top 50%...

You think 50% of people don't labor?

While about 50% to 60% of the adult U.S. population are active W-2 wage earners at any given time, the percentage that relies on labor exclusively (meaning they have zero capital income or assets to fall back on) sits right around 40% to 50% of working households.

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

#327

Post by newfriend » Tue, Jun 30, 2026, 5:36 PM UTC

mmooss wrote: post #295

PaulHoule wrote: post #258

Earlier quoted context omitted.

Someone could interpret that as a lack of capitalism rather than the opposite. That is, Henry Ford changed the world because he deployed capital to make workers so productive that they could afford to buy the cars they make. A person paid to do child care in an organization with overhead, who has to pay taxes, etc. is not productive enough to put their own children in child care. So child care fails to revolutionize…

> A person paid to do child care in an organization with overhead, who has to pay taxes, etc. is not productive enough They are highly productive but the market doesn't value them. It values the backup forward on a basketball team - an almost completely non-productive job - more than a doctor. It values the owner of a company at $1 trillion, which is obviously absurd.

It's not "absurd"... you're confusing moral value with economic scale.

A $1T founder is rewarded for building a massive system that employs hundreds of thousands of people, moved technological progress forward dramatically, and has positively affected the lives millions.

A doctor provides life-saving care, but they are physically limited to helping one person at a time. A backup NBA forward might not save lives, but their work is broadcast and monetized across millions of screens at once.

Arguing that entertainment is "non-productive" ignores human nature. People gladly pay to be entertained. If sports have no value, do you feel the same way about books, art, and movies?

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

#328

Post by jmye » Tue, Jun 30, 2026, 5:36 PM UTC

nradov wrote: post #35

The actual labor share of income is significantly higher when you include employer contributions to employee health insurance premiums. Healthcare costs have been rising faster than overall inflation for decades, and while many of those costs are passed on to employees the employers have also absorbed a significant chunk. If we want to increase the labor share then we'll drive down healthcare spending. And no, there'…

> And no, there's no simple solution to this problem. The notion that something like "Medicare for All" would solve the problem is a total fantasy, disconnected from actual US healthcare economics. Any real solution will have to work on multiple angles including preventive care, PBMs, provider wages, rationing, drug prices, fraud, malpractice insurance, interoperability technology, etc.

I have been saying this for years. I'm so tired of social media memes turning into sage wisdom for an entire generation who can barely spell healthcare, let alone have any vague understanding of it.

I'm and-then'ing, not disagreeing, but the big healthcare cost fix, IMO, still centers around education cost reform, and fixing the supply of mid-levels+ across the country.

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

#329

Post by nradov » Tue, Jun 30, 2026, 5:37 PM UTC

AnEro wrote: post #88

nradov wrote: post #35

The actual labor share of income is significantly higher when you include employer contributions to employee health insurance premiums. Healthcare costs have been rising faster than overall inflation for decades, and while many of those costs are passed on to employees the employers have also absorbed a significant chunk. If we want to increase the labor share then we'll drive down healthcare spending. And no, there'…

I've built and audited medical billing systems and billing practices. It isn't an economics issue in a traditional sense. Infact it would drastically reduce complexity of these systems and payments over time, even allowing private insurers to exist but have to compete with a base general coverage. (many smarter people than me at princeton did economics showing this worked out as a net less expensive than what we are…

I'm not sure what you mean by pricing for "HIPAA safe products"? It's not particularly expensive to comply with the HIPAA Privacy Rule, and honestly that level of privacy and security is the minimum we ought to expect in any industry that deals with sensitive consumer data.

There aren't as many physician-led practices anymore. Most of them have been rolled up into larger health systems in order to achieve economies of scale and increase negotiating power with commercial health plans. Which is one of the factors driving up overall healthcare system costs.

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

#330

Post by jacobolus » Tue, Jun 30, 2026, 5:37 PM UTC

missedthecue wrote: post #314

rsalus wrote: post #225

Earlier quoted context omitted.

> amount of labor being generated per person has not really changed not true, labor productivity has been steadily increasing: https://fred.stlouisfed.org/series/OPHNFB workers are simply capturing less of the economic value generated by their labor.

Increases in labor productivity is a curious thing to think about. Do I deserve more wages for using AutoCad instead of drafting paper? - The amount I'm working hasn't increased. Still an 8 hour day. - My job honestly is easier than it used to be; certainly less menial. - Strictly speaking, the education requirement is actually lower . It's easier and a lower bar to learn to become a decent designer in AutoCad than t…

In practice what happens is that on average the tool-user's wages go up slightly but most of the jobs in the field are eliminated, and the resulting large profit mostly goes to managers and financiers.