Executive Summary
- The labor share of income in the US has reached its lowest post-war level.
- The current decline is similar to past episodes, but the overall drop since 2000 is unprecedented.
- The situation on the ground remains unchanged, with the amount of labor generated per person remaining steady despite the growing economy.
The Buzz Score
The Internet’s Verdict: 60% Concerned, 40% Cautiously Optimistic
Forum Voices
Experts weigh in on the labor share of income, with some noting that
People are misreading the conclusion – the Covid related drop is normal and matches previous episodes, but the massive overall drop since 2000 is not.
Others point out that
FTA’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.’ … and they provide little evidence that it will evolve differently from past episodes.
Key Takeaways
The labor share of income has been declining since 2000, with some attributing this to the rise of solo entrepreneurs setting up businesses. The recent COVID-19 pandemic has also had an impact, with low-wage employers being criticized for their response.
As one observer notes,
it feels like every share of income is at its lowest except for the ultra wealthy.
Focus Keyword: Labor Share
