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

#341

Post by 3D30497420 » Tue, Jun 30, 2026, 5:44 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…

Salaries aren't about what someone "deserves" or "should earn".

Those in control will try to capture as much of the return as possible. How much value the worker captures is based on their relative power (ability to move to a higher paying employer, scarcity of skillset, laws such as minimum wage, etc).

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

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Post by impossiblefork » Tue, Jun 30, 2026, 5:46 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.

Yes, but German society is structured to require much less energy, just as Dutch society is structured to use much less land.

If you put Germans whose lives function in a US-style, even just getting to work will be a huge drag.

Misery depends on the structure of society. Here in Sweden I can walk to work. This means that I'm spending zero money on travel to work, and that my travel to work contributes $0 to Swedish GDP. But this is actually better than if Swedish GDP were higher and I was traveling by car.

This is one way in which GDP can be extremely misleading.

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

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Post by jagged-chisel » Tue, Jun 30, 2026, 5:48 PM UTC

Schiendelman wrote: post #255

saghm wrote: post #93

Earlier quoted context omitted.

I also don't think they addressed how borrowing against the wealth doesn't require any immediate taxes (and is often low interest, given how being a billionare means you get more favorable terms). There's nothing stopping someone in that position from just deferring taxes on the money they currently have, borrowing against it, and then investing that to turn into more money with taxes deferred even further so that th…

That requires their investments to keep going up in value. That doesn't last forever, the assets that people borrow against eventually need to be sold to pay back that loan. When they sell to make payments, those are taxable events.

How does it work if the loan defaults and those assets were used as collateral?

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

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Post by em500 » Tue, Jun 30, 2026, 5:49 PM UTC

crossbody wrote: post #28

What happens if large cohort of Boomers retires and stop working, instead living on their savings? Labor share of income drops. If you remove this effect, the labor share of income is flat - confirmed by last week's analysis in The Economist.

Pertinent data: https://fred.stlouisfed.org/series/SPPOP65UPTOZSUSA

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

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Post by [deleted] » Tue, Jun 30, 2026, 5:50 PM UTC

PaulHoule wrote: post #310

throw0101a wrote: post #277

Earlier quoted context omitted.

> Someone could interpret that as a lack of capitalism rather than the opposite. In Capitalism surplus economic value goes to the Capital class, so it seems like it is working as designed.

Some goes to the capital class, some goes to workers. The Marxist eschatology is that there are pressures that cause the fraction that goes to capital increases over time and breaks the system. Look at the good deal that the UAW has gotten for auto workers in the system, both US car makers and the union are pretty happy right to keep this system in place and shrink in the face of technological change like electrifica…

[deleted]

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

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Post by PaulHoule » Tue, Jun 30, 2026, 5:53 PM UTC

newfriend wrote: post #327

mmooss wrote: post #295

Earlier quoted context omitted.

> 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…

To get to the Baumol effect, the movie actor can perform once and be seen by millions whereas the theater actor has to perform at least once a night in front of one roomful of people. So the former can get paid more, a lot more.

Probably the highest paid athletes in the world are european soccer players and the thing there is that these salaries can be justified in terms of the value top players bring in a game where being relegated can bring the money train for a team to a halt. You don't see working-class soccer fans complaining about this (they feel the value!) but the owners and many representatives of capital get fuming mad about it.

(Funny, growing up in youth soccer in the US taught me to think of the game as an exercise in Brownian motion where there are too many people on the field who aren't held accountable. It wasn't until I had an argument with a recommender system that couldn't accept that I hated soccer that changed my mind and turned me into one of those sports fans who rolls out of bed Saturday mornings to watch the Premier League that I realized how high the stakes are in the European game.)

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

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Post by dfxm12 » Tue, Jun 30, 2026, 5:54 PM UTC

scottyah wrote: post #212

saghm wrote: post #68

Earlier quoted context omitted.

How do you know that you're not the one hanging around the "wrong people" to know better? You could just as easily be surrounding yourself with wealthy people as they could be with non-wealthy. Without data, it just sounds like "my social circle is more indicative of reality than yours". Maybe it is! But maybe not, so it's not particularly convincing

I'm not the only one with access to data though, if you're wanting to hold to your beliefs unless someone does the legwork for you and attempts to force it on you, I think your bias will overcome. Here is a source to begin anyway. The middle class (especially upper middle) saw their share of income drop, but the bottom 50% increased. https://equitablegrowth.org/u-s-income-data-for-2024-shows-t...

Talk about missing the forest for the trees. The bottom 50% saw a 0.2% increase (to just 21%) over 5 years. OK, this is technically more, but it is a paltry increase of a tiny base spread out across so many people. It is reasonably seemingly imperceivable to any individual in the group. The top 10%'s increase, on the other hand, was greater than this. A greater percentage increase on a slice of pie that was almost twice as big. In the larger context, this just shows greater inequality.

If people are saying they feel the squeeze, even in social media comments, they are probably being honest.

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

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Post by MintPaw » Tue, Jun 30, 2026, 5:54 PM UTC

saghm wrote: post #162

MintPaw wrote: post #147

Earlier quoted context omitted.

Data is the answer, it's just that so few people are willing to look at unbiased data. Although the start is asking a more measurable question.

What's the question I should be asking, and what data answers it? I'm genuinely asking

Not you particularly, I meant the original: "it feels like every share of income is at its lowest except for the ultra wealthy."

It's ambiguous in several way, no time scale, "ultra wealthy" isn't defined, and "income" somewhat ambiguous.

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

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Post by nickff » Tue, Jun 30, 2026, 5:54 PM UTC

topgrain2 wrote: post #199

nickff wrote: post #39

Earlier quoted context omitted.

Not the commenter you replied to, but one thing to note is that capital gains tax (at least in the context of investments in corporate equities) is applied after corporate taxes. Profits and reinvested earnings are taxed as profits, and they're two of the key components to valuing an equity. As such, when comparing income tax and capital gains, you should add the impact of corporate taxes. Incidentally, corporate tax…

> Incidentally, corporate taxes are why many small business owners pay themselves wage income, rather than doing stock buybacks or dividends. You've been sold some BS. Usually this is because you're required to take a "reasonable" wage for your role in a company. Otherwise I guarantee you every independent contractor out there (among others) would be operating in a way that made 100% of their income business profit,…

Many locales have laws that do not allow remuneration above the 'reasonable wage', to prevent tax circumvention by having employers spread wage payments across multiple family members of employees, but I am not familiar with any jurisdiction with a minimum reasonable wage law or regulation. Could you please link some source for the claim that business owners are required to accept a 'reasonable wage'?

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

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Post by didgetmaster » Tue, Jun 30, 2026, 5:54 PM UTC

vannevar wrote: post #139

legitster wrote: post #61

People are misreading the conclusion - the Covid related drop is normal and matches previous episodes, but the massive overall drop since 2000 is not. The situation on the ground is unchanged - the amount of labor being generated per person has not really changed, but the overall pie has grown massively around us.

This is consistent with the observation that the top 10% have captured a disproportionate share of GDP growth over the past few decades. https://equitablegrowth.org/new-data-reveal-how-u-s-economic... "The past three economic expansions have largely benefitted the top 10 percent. In each, the top decile received between 47 percent and 59 percent of all income growth in the expansion."

Every discussion about the 'top 10%' seems to make the underlying assumption that the set of people who fall under that category are consistent. While there are certainly individuals who enter the top 10% (or top 1%) and stay there; there are large numbers of people who move in and out of those categories.

For me personally, I am in the top 10%; but a few decades ago, I was not.