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

#561

Post by vannevar » Thu, Jul 02, 2026, 12:30 AM UTC

didgetmaster wrote: post #531

joe_mamba wrote: post #392

Earlier quoted context omitted.

Here's what I found asking AI: US Household Wealth Distribution (Q1 2026, Fed DFA) Group | Share of US Total Net Worth ------------|------------------------- Top 0.1% | 14.4% Top 1% | 31.6% Top 10% | 67.9% | Bottom 90% | 32.1% Bottom 50% | 2.5% So, the top 10% holds roughly as much wealth as the bottom 90% combined. The top 1% alone holds more than the entire bottom 90% minus the upper-middle segment. To be in the to…

Those numbers for 2026 may be right, but they absolutely do not mean that anyone who finds themselves in one of those categories must stay there. While there are many people who are currently in the bottom 50% and will probably stay there; no one is a slave who has to stay there. My original post (which is somehow unpopular on HN) points this out. I spent my first 30 years in that group and worked my way out of it.

You are making the common mistake of confusing two different things: the absolute capacity for an individual to improve their income over their lifetime, and the relative capacity to improve based on their current decile. If progress depended solely on merit, you would expect economic growth to be more or less evenly distributed across the percentiles---the "rising tide raises all boats" idea. That this doesn't happen suggests that people in higher deciles not only have more wealth, but are more likely to acquire additional wealth. Many wealthy people---and even some poorer ones---maintain that this is because the wealthy must be more industrious. But the vast majority of wealthy people started life in the upper deciles. And it's clear that having wealth makes it easier to make more wealth.

If you doubt this, consider the following thought experiment: imagine two strangers, identical in ability. One wins a million dollars in the lottery, the other is poor. If you were forced to wager your net worth on which twin is likely to make the most money over the next 12 months, who would you bet on? Now think about what kind of qualities would it take to get you to change your bet. How much smarter and harder working would the man with nothing have to be to overcome the advantage of a million dollars? Or even $100,000? You might say, yes, maybe in one year money would have the advantage---but surely an advantage in industriousness would win out in the long run? The mathematical answer is no, because the lottery winner will have a bigger advantage at the beginning of year 2 than he did at the start. If you bet on him in year 1, the bet is even surer in year 2. The reality is that he will continue to pull away. And that's what we see in the real world distribution of wealth: the gap between the wealthiest decile and the next poorest continues to expand, creating increasing social and political strain, as we can plainly see today.

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

#562

Post by digitaltrees » Thu, Jul 02, 2026, 5:10 AM UTC

throw0101a wrote: post #518

digitaltrees wrote: post #505

Earlier quoted context omitted.

But if that capital accumulation is unchecked it destroys the very market forces such as competition and price setting functions through supply and demand necessary for capitalism to work. So capitalists should want to prevent monopolies and concentration of wealth.

> So capitalists should want to prevent monopolies and concentration of wealth. Why do you assume that Capital class has an ideological loyalty to the capitalist system? If they can get rich without having to compete or do any kind of effort, don't you think they'd prefer that to actually 'working' for the money? Once they've got theirs, do you think they care about what happens after?

I don’t. That’s why I said capitalist not the capital class. Those are distinct groups. You can be a capitalist with no capital and a monopolists that would be happy with state capture once you win and a feudal oligarchy. Much of Silicon Valley is revealing themselves to be just that. They’re going to find out the stark consequences of taking all the toys on the playground

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

#563

Post by mishellaneous » Thu, Jul 02, 2026, 7:16 AM UTC

afc wrote: post #323

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.

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...

the Wikipedia page on Europe you cite lists average, not median wage in Germany.

the average household income for Mississipi is given as $76,305/year by this US census link: https://data.census.gov/table/ACSST1Y2023.S1901?q=S1901&g=01... (which is cited in the Wikipedia page you cite)

there is also another question. the figure you cited for Germany is gross wage. net wage would be €3,324/month, or $45,536/year. is "income", in the US survey, after taxes? i wasn't able to find the definition of "income" in the American Community Survey, but i notice that besides "income", they also have "earnings" (which is higher).

finally, we need to correct for cost of living. i think that would explain a lot of the difference.

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

#564

Post by mishellaneous » Thu, Jul 02, 2026, 7:32 AM UTC

digitaltrees wrote: post #500

legitster wrote: post #279

Earlier quoted context omitted.

I agree with all those things, but if we start making up numbers and definitions we're at risk of undoing actual progress. Maybe it feels good to say "actually everyone is a victim of capitalism", but it muddies real necessary work when it comes to determining whether to prioritize how resources need to be allocated between a disabled person living on the streets vs a graduate student who is currently just a little u…

That’s a reasonable perspective. I would ask though, whether the fear of muddying the discussion is weaponized to create the impression of complexity, a broad range of intractable causes that lead to the conclusion that any solution is futile. The forces that benefit from the status quo deploy this quite effectively

i agree with you that this is a technique that is used to make people give up. not only in the context of this discussion ("how is the economy doing"), but in many discussions. i see it being effective often enough for it to be worrying. i guess it's as they say, this is why you need a population that is indeed educated (on which these techniques would supposedly be less effective) for democracy to work.

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

#565

Post by 93po » Thu, Jul 02, 2026, 4:17 PM UTC

mech998877 wrote: post #539

tancop wrote: post #395

Earlier quoted context omitted.

im going to be controversial and say no one should have anything other than labor as their main income until they retire. anything you can do thats useful to society counts as labor (but not vice versa, you can work as a robber or corporate lobbyist). from line cooks to wall street ceos to open source volunteers and stay at home moms who dont get paid but still work. landlords and executives count because management…

So if you buy a lawnmower and use it for your business to cut your neighbor's grass (instead of tearing it apart by hand), that should be illegal? You've used a capital investment to increase your productivity. Your productivity gains have driven anyone using a less efficient method out of the market. What if it's a robot lawnmower instead of a push mower? What if you and your neighbors pooled in some money to buy th…

I think they could have worded it better. I think they were saying that profiting from the labor of others is unethical. Using robots isn't unethical because you're not profiting from something that needs the income for itself. And it isn't really "working". Working requires expenditure of limited time and resources, which robots either of unlimited of, or is provided by the owner.

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

#566

Post by 93po » Thu, Jul 02, 2026, 4:20 PM UTC

triceratops wrote: post #410

tancop wrote: post #395

Earlier quoted context omitted.

im going to be controversial and say no one should have anything other than labor as their main income until they retire. anything you can do thats useful to society counts as labor (but not vice versa, you can work as a robber or corporate lobbyist). from line cooks to wall street ceos to open source volunteers and stay at home moms who dont get paid but still work. landlords and executives count because management…

What if you volunteer 30-40 hours a week but pay your bills with rental income? What's your position on that?

What if you dump toxic waste into a river to make money, but volunteer 30-40 hours a week? Does it make the dumping less unethical? The point isn't about doing labor, it's about not profiting off of other's labor or rent-seeking.

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

#567

Post by 93po » Thu, Jul 02, 2026, 4:28 PM UTC

smt88 wrote: post #514

tancop wrote: post #395

Earlier quoted context omitted.

im going to be controversial and say no one should have anything other than labor as their main income until they retire. anything you can do thats useful to society counts as labor (but not vice versa, you can work as a robber or corporate lobbyist). from line cooks to wall street ceos to open source volunteers and stay at home moms who dont get paid but still work. landlords and executives count because management…

> no one should have anything other than labor as their main income until they retire No one should start a business and pay salaries to their employees instead of themselves? What if I see that a biotech startup is working on mRNA cancer vaccines, and I want to invest in that? And then it pays off and I make money off of it?

They're saying you should be compensated and make income for the time it took you to form the business and hire employees. You shouldn't (in their theory) then continue to earn income off the labor of the people you hired - the income they generate from their labor belongs to the laborer. You can also continue to make a salary from the business in exchange for the direct labor you do - management, accounting, whatever else. But if you stop working for 5 years and retire to a beach, you shouldn't be extracting continued income from the workers while you do nothing.

Investing as people think about it only exists because people who invest expect value from the thing they invest in. That value only exists because of a mixture of current and future expected income from the business. If the business itself doesn't generate income for people who aren't doing the actual labor, there's no reason to invest unless you have a personal interest in the continuation of the business, i.e. you're an employee whose income depends on that job. In this scenario you'd have employee-owned businesses.

Obviously this raises the question of where funding comes for new innovation and growth (public investment banks, worker cooperative financing, government grants), but then it goes down a rabbit hole about alternatives to capitalism.

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

#568

Post by newaccountman2 » Thu, Jul 02, 2026, 5:06 PM UTC

fsckboy wrote: post #520

newaccountman2 wrote: post #471

Earlier quoted context omitted.

They are a deeply selfish and immoral generation on the whole who make excuses for evil and denigrate anyone tryin to do good. Just looking at their voting patterns makes it quite clear. Such a lame attempt to defend them by you lol--what makes you think money has anything to do with it? That's Boomer logic; IME, Boomers and right-wingers believe everyone is as self-centered as they are.

the conceit of leftists is that they are godd and pure... but they never are and it NEVER works out, just makes them insufferaby sanctimonious along the way. I was raised completely leftist btw, by good people, but I saw the craven insides of all their friends. I didn't say the boomers weren't the way you describe, I said you're just like them, lofty ideals, all too human boundaries and self control.

I am nowhere near as left as you seem to believe. But the religious hatred many Americans have of whatever they think socialism is and the way they defend the current brand of American capitalism, even though it continues make the rich richer and the poor poorer, is morally craven and idiotic.

It's really not hard to be more morally pure than Republicans anyways; not continuing to vote for the Trump party is among the lowest possible moral bars.

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

#569

Post by triceratops » Thu, Jul 02, 2026, 8:35 PM UTC

93po wrote: post #566

triceratops wrote: post #410

Earlier quoted context omitted.

What if you volunteer 30-40 hours a week but pay your bills with rental income? What's your position on that?

What if you dump toxic waste into a river to make money, but volunteer 30-40 hours a week? Does it make the dumping less unethical? The point isn't about doing labor, it's about not profiting off of other's labor or rent-seeking.

Rent-seeking is different from being a landlord. And I mean that in a "dictionary definition" way - they are literally different concepts.

And we all "profit off of others' labor" when we buy things.

I was responding to the person who said "anything you can do thats useful to society counts as labor". According to them only retired people are allowed to live off investment income. But what if the thing someone labors at doesn't make them income, and they support themselves with investment income? They've satisfied OP's "be useful to society" dictum, so why is it so immoral for them to be a landlord.

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

#570

Post by didgetmaster » Fri, Jul 03, 2026, 11:42 AM UTC

joe_mamba wrote: post #532

didgetmaster wrote: post #531

Earlier quoted context omitted.

Those numbers for 2026 may be right, but they absolutely do not mean that anyone who finds themselves in one of those categories must stay there. While there are many people who are currently in the bottom 50% and will probably stay there; no one is a slave who has to stay there. My original post (which is somehow unpopular on HN) points this out. I spent my first 30 years in that group and worked my way out of it.

>no one is a slave who has to stay there That's like saying not everyone who finds themselves homeless must stay homeless, as if they can just choose to go buy a house. >I spent my first 30 years in that group and worked my way out of it. And what did the job market look like over the those 30 years versus today? You probably weren't competing with infinity AI bots at every resume application. Not here to steal your…

The vast majority of the homeless in the US, are homeless by choice. They are addicted to drugs and/or refuse to get a job.

You don't have to be able to afford to buy a nice house in order to escape living on the streets.

You might think that my story is tired, but literally millions of people in this country have done the same thing. Telling people who are struggling that they can't improve, certainly doesn't help.