The labor share of income in the US is at its lowest post-war level
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The US labor share of income is at its lowest post-war level following COVID.
The labor share of income in the US is at its lowest-ever post-war level, driven by declines after COVID and earlier in the 2000s. The post-COVID decline follows cyclical patterns of pre-2000 recessions: a sharp increase during the downturn followed by a modest decline and flattening. Unlike the 2000s recessions, the post-COVID decline is not steeper or lacking a rebound. Within-industry changes, not sectoral reallocation, account for the fall, similar to prior recessions. Reallocation spiked at the pandemic's onset but quickly subsided, while earlier recessions saw persistent reallocation.
What commenters are saying
Commenters largely see the decline as a predictable outcome of capitalism's drive to reduce labor costs, with some viewing it as unsustainable and potentially leading to political backlash. A significant camp argues the ultra-wealthy avoid income classification, though others note capital gains differ from earned income. Some highlight the 2000s drop as more striking than the COVID-era dip. One commenter critiques the sensationalist title, noting the article concludes the decline is not a distinct break from past cycles. A dissenter argues non-wealthy landlords and small business owners also derive non-labor income.