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

#371

Post by ETH_start » Tue, Jun 30, 2026, 6:18 PM UTC

torginus wrote: post #266

ETH_start wrote: post #86

I wonder if labor itself will become an anachronism in the age of AI. Perhaps the future economic landscape will be dominated by capital because everyone will own capital. You will command a small army of agents to do whatever you want. You will no longer need to work for someone. You own small businesses far more than you could possibly operate in the pre-AI era and they will mostly operate autonomously with minimal…

We live in a world with a severe housing crisis - not shortage, as there are usually enough units, people just can't afford them. One would assume the difficulty of building housing has gone down with the general progress of technology - and if all else fails, you can just do what they did 50, 100 years ago where affordability was far less a struggle - people, who had less income in real terms spent proportionally le…

Housing is exceptionally vulnerable to capture because it is immobile. AI on the otherhand should see its cost continue to plummet due to competition. Per token costs have already fallen exponentially over the last three years.

I'm not sure if this addresses the point you're trying to make though. If not, please clarify your argument for me.

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

#372

Post by joe_mamba » Tue, Jun 30, 2026, 6:19 PM UTC

impossiblefork wrote: post #342

mc32 wrote: post #185

Earlier quoted context omitted.

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 G…

>Here in Sweden I can walk to work.

That's you. but nobody In Sweden drives to work?

I see walking to work as an relative to each individual and their job lcoatiopna dn circumstance of where they live, not a country related thing.

For example, ,ost of my jobs in EU that me and my gF had required a car to get to work because companies put their offices out in the boonies to save money so walking was not an option, and neither was public transport.

> But this is actually better than if Swedish GDP were higher and I was traveling by car.

GDP growth "experts" would disagree. It's the reason we don't have mandatory WFH for white collar jobs after Covid proved it's possible and salves the environment

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

#373

Post by dcrazy » Tue, Jun 30, 2026, 6:19 PM UTC

dozerly wrote: post #90

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.

We have one of the worlds most prosperous economies, and half of the US is living in abject poverty while quality of life for everyone is decreasing.

Can you define “abject poverty”?

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

#374

Post by saghm » Tue, Jun 30, 2026, 6:19 PM UTC

ETH_start wrote: post #272

saghm wrote: post #140

Earlier quoted context omitted.

> To the extent that healthcare costs have skyrocketed, it's precisely because of government intervention in the U.S. Healthcare industry has massively increased over the last 50 years, especially in the form of tax incentives for employers to compensate employees by way of health insurance. It fails to follow logically that one specific way the government got involved that drove costs up means that any possible inte…

Health care costs across the developed world have skyrocketed for exactly the same structural reasons. Yes, implementations have been different in their details, but the larger structure is the same no matter where you look in the developed world. Government intervention has increased. That means more top-down management and less bottom-up self-organization based on private property and individual incentives. This is…

> This is not some spurious speculation. That market-based systems drive down costs enormously is replicated across dozens upon dozens of industries. It's one of the most replicable results in economics to the extent that economics can be replicable. As for why the costs in other countries are not quite as high as the U.S., it's because health care costs also increase as per capita GDP increases and the U.S. has higher per capita GDP. Moreover, because the U.S. has some aspects of its health care system still living more in the private sector, there is less top-down rationing. Other countries see very clear examples of rationing, so people spend less on end-of-life care.

That actually sounds a lot like speculation. You're claiming that the most largest structural difference in the healthcare system in the US compared to other countries is unrelated to the difference in costs, and that other factors explain it, based on inferences from things not related to healthcare. I don't understand how you can have any degree of confidence that single payer versus private insurance has no effect at all based on what you're saying.

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

#375

Post by PaulDavisThe1st » Tue, Jun 30, 2026, 6:20 PM UTC

stretchwithme wrote: post #320

u1hcw9nx wrote: post #180

Earlier quoted context omitted.

Also note: Labor share has declined similarly across OECD countries for several decades. Automation, robots, software etc. they are all capital share.

Employee compensation comes from capital. And employees are working at companies that provide robots, etc. There's a return on capital than is not spent on employees. That reflects how much capital is growing and how much can be spent on employees in the future.

> Employee compensation comes from capital.

All human collective endeavors (with few exceptions) require 3 kinds of human-related input: capital, labor and ideas.

Nobody puts their capital into an endeavor in which the plan is for the that capital to provide renumeration for the labor for more than the shortest possible time (*). The goal is always to generate revenue in sufficient volume to pay for the labor, and when that goal is met, that success is a function of all 3 kinds of contribution.

So no, employee compensation does not come from capital, but from revenue that results from the successful interaction of capital, labor and ideas.

(*) non-profits would be an obvious exception, except that nobody actually talks about investing capital in such organizations, we just make "donations" or "grants". That money plays the same role as capital, however.

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

#376

Post by nradov » Tue, Jun 30, 2026, 6:20 PM UTC

ajross wrote: post #51

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'…

Is there a reference you can cite with corrected numbers? Honestly this sounds like excuse-making, especially when used as a jumping point into a decidedly partisan take (complete with scare quotes!) on the essentially unrelated subject of public health care financing. The idea seems to have merit, but it's unconvincing to people outside your bubble and I'm dubious.

You misinterpreted by comment. It was not partisan, and was based on reality and cold economics rather than ideology. None of the major US political parties have workable reform proposals that could actually be implemented and achieve net positive results.

This is a complex topic with no tl;dr possible. If you want to be able to participate in discussions on a rational, quantitative basis then a good starting point is "The Price We Pay: What Broke American Health Care--and How to Fix It" by Marty Makary, MD. It goes into the numbers far better than I can cover in a short HN comment.

https://www.bloomsbury.com/us/price-we-pay-9781635574128/

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

#377

Post by saghm » Tue, Jun 30, 2026, 6:21 PM UTC

nradov wrote: post #208

saghm wrote: post #123

Earlier quoted context omitted.

I think the point is that we might as well just give up the pretense of a free market healthcare solution and just focus on what's humane.

Is it humane to leave a patient to die in an ambulance when a single-payer nationalized healthcare system is over capacity? https://www.theguardian.com/society/2025/apr/06/englands-nhs... I'm not trying to be snarky here, the point is that there is no easy solution and optimizing based on what politicians subjectively consider "humane" isn't going to get us anywhere. If we want to actually fix the problem then we nee…

> I'm not trying to be snarky here, the point is that there is no easy solution and optimizing based on what politicians subjectively consider "humane" isn't going to get us anywhere.

On the contrary, most politicians seem very adamantly against what I'm proposing. I don't know why you think I'm suggesting that we delegate how we determine what's humane to politicans.

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

#378

Post by PaulDavisThe1st » Tue, Jun 30, 2026, 6:22 PM UTC

didgetmaster wrote: post #350

vannevar wrote: post #139

Earlier quoted context omitted.

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.

The statistical evidence for your claim is not good. There is certainly a generational effect in that 5 year olds are typically not in the upper decile, simply because they generally have little to no individual wealth or income. But in the USA at least, most people die in the same decile they were born into.

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

#379

Post by saghm » Tue, Jun 30, 2026, 6:23 PM UTC

nradov wrote: post #299

ratelimitsteve wrote: post #273

Earlier quoted context omitted.

is it humane to solve that problem by excluding people based on income? that's what your proposing, as that's how markets solve problems like this: if more people need a product/service than the market can provide prices go up and the poor are excluded. also not trying to be snarky but that's the choice in front of us. part of the problem with free market solutions to healthcare is the feasibility of walking away fro…

Stop lying, I haven't proposed anything of the kind. Free market solutions often include giving cash subsidies to certain participants (and you would be aware of this if you had bothered to do even basic research on serious healthcare system reform proposals before commenting). I'm simply pointing out that it's a complex problem with multiple causes and there is no simple solution.

They're not lying any more than you were when you responded to my suggestion that we should prioritize what's humane with some sort of interpretation that I was saying something about politicians.

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

#380

Post by PaulDavisThe1st » Tue, Jun 30, 2026, 6:24 PM UTC

vondur wrote: post #351

vannevar wrote: post #139

Earlier quoted context omitted.

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."

Aren't most of the tech workers here part of that 10% and I'd assume they own houses in some of the most expensive areas, so they are technically part of the capital class?

Being a part of the "capital class" does not mean simply having passed a net worth threshold.

It means having sufficient liquid capital that you can invest it in uncertain outcomes, generally without fear of poverty or perhaps any real negative effects on one's life at all.

Owning a very expensive home in a very high cost-of-living place (or even in a not-so-high cost-of-living place) does not place a person in that position.