What’s the Labor Share of National Income?

Process

	Status	Items
Output	None
Questions	None
Claims	None
Highlights	Done	See section below

Highlights

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income share has declined for non-farm workers from about two-thirds, 64.1% in the first quarter of 2001, to 55.8% in the first quarter of 2024.

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in 1930, workers took home about 57% of the money that was generated by their labor. 57%. That labor share went up in the 1940s, to about 65% — almost two-thirds of corporate income was going to workers. It stayed over 60% for the next few decades, well into the 1970s.

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id799702645

had the more equitable income distributions of the three decades following World War II (1945 through 1974) merely held steady, the aggregate annual income of Americans earning below the 90th percentile would have been $2.5trillionhigherintheyear2018alone.Thatisanamountequaltonearly12percentofGDP—enoughtomorethandoublemedianincome—enoughtopayeverysingleworkingAmericaninthebottomninedecilesanadditional$1,144 a month. Every month. Every single year.

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id799702674

At a recent pace of about $2.5trillionayear,thatnumberweestimatecrossedthe$50 trillion mark by early 2020. That’s $50trillionthatwouldhavegoneintothepaychecksofworkingAmericanshadinequalityheldconstant—$50 trillion that would have built a far larger and more prosperous economy — $50 trillion that would have enabled the vast majority of Americans to enter this pandemic far more healthy, resilient, and financially secure.

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