U.S. workers took home their smallest share of capital since at least 1947

edoceo

A disaster. Economy is a flow of capital, it cycles up. USA needs the general public to have money for necessities as well as a little more for saving and then extras. Top earnings come from the support of 1000s of participants with lesser earnings. This is an unhealthy economic trend. It's more than a stagnation risk. Issues like these are created in a short term but take comparatively longer to correct.

0c3ca83

Sounds like the policies that were put in place are doing what they were designed to do, and directing money to where they were intended to. The work on technology to take the place of policy is proceeding, thought slower than the leadership would prefer.

RitchieRicher

as someone said, if your workers are overweight, you are doing Capitalism wrong

kingkawn

It’s ok, soon the greedy will take home their smallest share of heads

_heimdall

This shouldn't be a surprise. The US came out of WWII with similarly high debt to GDP. They only corrected that through financial repression, and that's likely to be their only chance of lowering that debt ratio today. If we don't spend the next few decades skating by while the currency is debased under our noses, I assume its because there's a much more severe and tragic response.

skew-aberration

Capital != money. Confirmed that author does not have finance, economics or business background.

robotburrito

Surely there is a ycombinator startup around the corner that will fix this problem.

toddmorey

So here's what I don't get: The United States is the world's largest consumer market. From what I can find, personal consumption expenditures (PCE) account for about two-thirds to 70% of total US economic output. We live and die on consumer spending and confidence. So next we automate the bejeebus out of this economy with AI robots and Elon believes it grows 3x in under five years. Splendid. But if a consumer-driven economy has no payrolls, it eventually has no buyers. It just seems to me that ultimately, billionaires and investors cannot decouple themselves from the masses... but maybe it's a game of get mine before the system collapses?

Artoooooor

More AI will surely solve this problem.

MadrasTh0rn

We lost WW3

skybrian

Instead of looking at share you could look at each trend separately. They're both going up, but corporate profits are going up more: Corporate profits versus labor income https://fred.stlouisfed.org/blog/2018/08/corporate-profits-v... Why is labor going up? In part due to more hours worked: Nonfarm Business Sector: Hours Worked for All Workers https://fred.stlouisfed.org/series/HOANBS If you divide labor income by hours worked, you should get hourly compensation: Nonfarm Business Sector: Real Hourly Compensation for All Workers https://fred.stlouisfed.org/series/COMPRNFB Working-age population is leveling off, though: https://fred.stlouisfed.org/series/LFWA64TTUSQ647S One would expect that retirees are mostly living off capital rather than labor. Wouldn't an increased elderly population result in a lower labor share? Or maybe something else. This paper suggests that as workers get older, they switch jobs less and get fewer raises: "We find that a 60-year-old worker receives half the marginal product relative to when they were 20. Together with recent demographic trends, this can account for 59% of the recent decline in labor’s share of earnings in the United States." https://www.bankofcanada.ca/2023/04/staff-working-paper-2023... And no matter how you slice it, this is all working with national averages, which tell us little about anyone's personal situation.

DaedalusII

Machine intelligence could drive as much transfer from labor to capital in the next decade as the previous wage-to-financial economy produced in forty years. This will push wealth concentration in leading OECD economies beyond the inequality seen in Brazil and Mexico.

laughing_man

"Share"? What does that mean? Is Fortune confused about the difference between employees and owners?

SideQuark

Also productivity costs more in tooling than ever before per worker, so it's not a surprise that a smaller amount of capital goes to humans when the gains are majority from capital outlays, not labor improvements. Here's BLS data for total cost to employ for the last 25 years. https://fred.stlouisfed.org/series/ECIALLCIV Note how much it has increased over simply wages, as it costs more and more to employee a person due to laws, benefits, and tooling.

ChrisArchitect

6 days ago: US Wages Share of GDI at 75 Year Low https://news.ycombinator.com/item?id=50238884

rTX5CMRXIfFG

How does this tie in with the opposing view’s narrative that gdp per capita has been increasing since the industrial revolution? I mean, this is an issue I’d actually like to take a side with—I do in fact dislike it whenever the latter statistic comes up because the actual and lived experience of cost of living and capital accrual in the present day is actually incredibly difficult, that even the prospect of home ownership looks bleak for many people.