US Labor Share of Income Hits Record Low of 52.8%, BLS Data Shows

The share of US economic output paid to workers fell to 52.8% earlier this year, the lowest level in Bureau of Labor Statistics records dating to 1947, as artificial intelligence investment accelerates and corporate profit margins reach historic highs. The labor share of income has declined unevenly since the rise of personal computing more than 25 years ago, with this year's drop more pronounced. JPMorgan chief US economist Michael Feroli said the measure could fall below 50% by the end of the decade. Goldman Sachs economist Abhay Duggirala attributed 40% of the 7.5-percentage-point decline since the 1990s to tax-law changes favoring pass-through entities, higher depreciation from short-lived technology goods, and understated equity-based pay. The remaining 60% reflects higher markups, industry concentration, automation and weaker labor bargaining power. The Tax Foundation, adjusting for depreciation and taxes, pegs capital's net-income share at 22.6% to 31.7%, disputing the severity of the BLS figures. EY-Parthenon's Gregory Daco said a return to a 56% labor share would boost household income by $3,900.