The Labor Income Share Plummets

One needs just one graph to understand the increasing stress in US society (data from the BEA -Table 1.10. Gross Domestic Income by Type of Income). This is the share of employees (i.e. labor; the other part goes to capital) income in the Gross Domestic Income. It dropped from 0.58 in 1970 to 0.52 in 2014  - one the year before Trump won. The share of capital grew from 0.42 to 0.48, accordingly. The labor/capital income ratio dropped from 1.38 (0.58/0.42) to 1.08 (0.52/0.48). Considering the strong trend observed since 1990, one can expect the fall to the level observed in 1929 during the next 16 years. This cliff jump starts in 2020! The labor income share in 2019 will be indicative. 

 

Disclosure: None. 

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.