Hacker News

This is consistent with the observation that the top 10% have captured a disproportionate share of GDP growth over the past few decades.

https://equitablegrowth.org/new-data-reveal-how-u-s-economic...

"The past three economic expansions have largely benefitted the top 10 percent. In each, the top decile received between 47 percent and 59 percent of all income growth in the expansion."

> amount of labor being generated per person has not really changed

not true, labor productivity has been steadily increasing: https://fred.stlouisfed.org/series/OPHNFB

workers are simply capturing less of the economic value generated by their labor.

> The situation on the ground is unchanged - the amount of labor being generated per person has not really changed, but the overall pie has grown massively around us.

My understanding is that "fixed" costs like rent and groceries have gone up and taken more of people's budgets, while wages failed to catch up with this inflation.

If that's the case, it's markedly different from "situation on the ground is unchanged". I don't know how the overall pie is doing, but it has not grown enough to compensate for the labor share drops shown in the article. The slice on my plate is certainly lighter.

>the amount of labor being generated per person has not really changed, but the overall pie has grown massively around us

I don't see where the article made that claim. Are you making it yourself and can you support it? That sounds like something that would happen when technology improves. What the article does do, is pose a question that it never answers: "When the labor share falls, it means that productivity, prices, or both [which?] are growing faster than wages."

We have one of the worlds most prosperous economies, and half of the US is living in abject poverty while quality of life for everyone is decreasing.

>the amount of labor being generated per person has not really changed

im not really understanding what you mean. i dont get how labor is generated, in particular. do you mean to say the amount of total hours dedicated to labor per person or something else?

I don't know which people you're referring to, but the conclusion is pretty clear: the _share_ of the total pie captured by labor is shrinking. Productivity is increasing, but capital is capturing all, or almost all, the benefits of that increased productivity and economic growth.

AI is going to further exacerbate this inequality.

Time to re-read Capital In the 21st Century.

It's just rent.

Rent for the homes we live in (including "rent" as mortgage payments to the bank)

Rent passed through as costs to the consumer for the businesses we patronize.

We're stuck at home more affording to be able to do less so the people who own don't have to work.

Since 2000 the biggest economic change is software. While most workers doing physical jobs have only made themselves slightly more efficient (or maybe mass immigration has maybe even reduced efficiency in some sectors), some workers (tech workers) have made themselves hundreds or thousands of times more efficient and captured the gains as equity (either in their own startup, their job, etc...). The positive is that growth overall has still lifted living the average living standard.

Benn Jordan just released a new video proposing that we are not in “late stage capitalism” and instead we are currently an offshoot of capitalism called “leverageism”.

In the video he describes how when people like Elon Musk get to the level of wealth that they are at, it becomes far more beneficial for them to take from (or stunt) the spending power of lower classes than it is to add to their own net worth dollar figure - simply put, the former moves the needle far more in their favor than the latter.

Definitely explained the idea of our slice remaining the same while the overall pie around us is getting larger.

*Edit: Benn not Ben

> I guess there is no way to predict other than check back in after time passes.

Welcome to the dismal science of economics, where the rear-view mirror is crystal clear but the windshield is totally fogged up.

Bearish, they are already working as hard as they can to replace everyone with AI or at least Actual Indians playing AI

I don't think so. Opening sentence is this:

> The labor share of income in the U.S. is currently at its lowest-ever level in the post-war period.

Agreed on the 2000 drop though. Would be interesting to read a retrospective on that.

Capital be praised that capital owners are back on top.

May the low-waged ever be trodden upon and forever know their true place.

Those that died or became disabled during covid are mewling degenerates.

Their cries of 'illness', 'poverty', and 'homelessness' are precisely as useless as the wailing and lamentation of women in their menses, a farcical thing to be dismissed and ignored.

May the Fed be ever in your favor, Amen

Highly suggest adding "hysterical" to your internal vocabulary filter.

It's not necessarily limited to the ultra wealthy, but outside of a few key areas (as someone mentions, those profiting off of the inflationary spike, those in the real estate market, etc) it is more or less the case, yes.

It's not, you're just hanging around the wrong people (or spending too much time on social media comment sections).

It’s not. There are plenty of non-wealthy people who make money from things other than their labor.

Small-time landlords are an example, as would be anyone who owns a small business and draws cash from profits rather than taking a salary.

The annoying/sad/infuriating thing is the ultra wealthy don’t have “income.” Technically, according to IRS rules, much of what they experience (housing, food, etc) should be classified as income. But their lawyers and accountants help them keep that looking quite low.

Not at all. The real estate share of income is probably at its highest among a lot of people who belong to the non-labouring class, but are far from ultra wealthy. But it's nice to have a scapegoat, isn't it?

The root of this started in the 70s as the New Deal coalition decayed and Keynesian economic theory fell out of favor among the elites.

To be fair their were good reasons at the time to think it wasn't working either.

The US has historically been quite opposed to the workers becoming shareholders.

The longer graph (starting at 1947) shows the shift in 2001 on more startlingly

https://fred.stlouisfed.org/series/PRS85006173

Corporate profit vs Labor income divergence (only up to 2018)

https://fredblog.stlouisfed.org/2018/08/corporate-profits-ve...

Other countries in the world have manage to keep workers bargaining power in the face of globalization and technological progress.

I think in the case of US literally killing workers and union people is a huge part of why US workers lack power and why US unions are so impotent.[0]

[0] see Battle of Blair Mountain and what work Pinkerton mainly did from its founding to WW2, as examples.

Do you have any evidence for this, at all?

Exactly. Crazy you are getting downvoted for having the most informed comment here. The other aspect of this is the rise of franchisees in America. Previously, the salary of the manager of a corporate store would be measured as labor income. In a franchise, it would be measured as capital income.

https://bfi.uchicago.edu/insight/research-summary/the-rise-o...

It transitions back to a more feudalist state. The series finale to "you will own nothing and be happy."

That is, if they're successful.

Not much. Early economies relied on mutual trade. I give you X and in return you give me Y. Soon we realized that you cannot always give Y in return immediately, so we invented accounting to keep track of your promise to give me Y at some point in the future. As time went by eventually we stopped caring about getting Y back in return and started taking an interest in collecting the promises themselves (i.e. profit).

Why would someone want to collect promises? That seems rather silly, right? What having a lot of promises gives you is social standing. People treat you differently — better — when they give you their promises. If traditional labor goes away, the economy simply becomes you promising to hold those who have things in the highest regard; to be there as their friend when they call for you to. That is the same modern economy we already have but with less steps.

As a hardware founder, I’ve seen the opposite until very recently. Labor cost has been going up much faster than inflation, at lease in hardware assembly.

Do you have a source?

Pertinent data: https://fred.stlouisfed.org/series/SPPOP65UPTOZSUSA

It's not the tech but who sees the benefits. The issue at play is the monopolization and concentration of power.

Ie, why can one guy who is insanely wealthy due to stock valuations take loans against that to pull various levers of power. We didn't elect him, we need a way to control that outsized influence.

Not technology - that's only downstream of politics.

No political administration in my lifetime (!) has made policy decisions against the interests of tech monopolists. The closest we got was Lina Kahn's FTC.

Technology isn't the problem. The problem is the generation in governing power through the last 2 decades has no problem burning down the country's future to maintain lavish retirement funds for themselves.

Yes by design. Basically just by designating one part of the economy as non-productive consumption economy, and the other part as production economy, they create the justification for inflation - so that the government can have free money and take it from the stupid consumers by decreasing their wealth a little every year should they choose not to spend it, and give it (sorry, invest) to the nice productive entrepreneurial capitalist part of enconomy who will somehow reinvest it allegedly (read: mostly buy up shit the former half needs and sell it back to them at markup), the system has a direct wealth transfer mechanism that points from the poor to the rich, it couldn't be any more shameless and obvious if they tried.

We live in a world with a severe housing crisis - not shortage, as there are usually enough units, people just can't afford them.

One would assume the difficulty of building housing has gone down with the general progress of technology - and if all else fails, you can just do what they did 50, 100 years ago where affordability was far less a struggle - people, who had less income in real terms spent proportionally less on it.

So did society devolve that an unit of industrial output has become more expensive? Or did money and resources just go into a parallel 'rich people economy', that has created a constant drain on the resources of average people?

Assuming your labour contribution to these agents is 'minimal':

Why would you own them, instead of some well capitalized billionaire?

To the extent that you do have capital, why do you assume that your 'minimal direction and guidance' would outcompete a full time specialist working for that billionaire?

Love this.

Parking and speeding tickets should have income brackets, at least.

In the early Internet I saw this thing, no idea if it’s true but it sounds good (someone can math check it), goes something like:

A person pays $2 to play basketball on a public court.

Michael Jordan gets paid $2k to play on the same one.

A person pays $100 for basketball shoes.

Michael Jordan gets paid $100k to wear the same ones.

A person pays $40 to go see a basketball game.

Jordan gets paid $400k to attend the same game.

Michael Jordan makes about $5 per second.

If Michael Jordan saved all his money without spending a penny for 250 years…

He wouldn’t even have half as much as Bill Gates!

It made me think differently about money and consumer spending.

> please leave a downvote to indicate I caused you emotional distress.

How deeply puerile.

The problem is we are one step beyond capitalist exploitation as described by Marx - basically the surplus which fatcat industrialists extract from the laborer does not really exist - you have to compete in the market with others who do the same, and offer things at the lowest possible margins, and if you need to be big enough to get capital in, you have investors who demand their profits.

So basically you are squeezed between the public demanding lower prices and the investors demanding record returns. If you are not a monopoly, that is an impossible ask

Basically the only truly profitable businesses left out there is selling hopes and dreams to investors, and shovels to those who build them, which just about describes tech & AI, with companies who regularly manage to 10x their valuations (and P/E ratios)

Marx fails to imagine a world in which labor actually has little to no value.

His worldview is primarily that capitalists 'steal' the valuable labor. However it doesn't seem that that is actually the world we are in. Instead the intrinsic value of human labor seems to be slowly trending towards zero.

And it kind of makes sense, same has happened with oxen labor, horse labor, etc.

Unfortunate to see educated and smart people quote Marx. No serious economist takes him seriously.

Labour theory of value is useless. Falling rate of profit is not empirical. Capitalism didn’t go away as he predicted.

Workers enjoy highest living standards of any time in history.

I very much doubt that. There isn't enough class solidarity to pull it off.

There will be a few who brand themselves as such. But actually seizing the means of production and handing them over to the people? -- The oligarchs will burn this country to the ground before they permit that to happen.

Remember Occupy Wall Street? Back then the oligarchs were somewhat scared.

Who owns the capital for those future investments? Who will receive returns on those investments?

Speculation or actual investment? Assuming that the allocation of capital is somehow aligned with what’s optimal for the economy/society seems naive

> The only shocking part to me is how people continually and intentionally don't see it or, worse, think they'll be unaffected by it so don't care. You see this on HN where so many people seem to think they'll be Jeff Bezos one day.

Software engineers are a special kind of stupid: the kind that thinks they're smarter than everyone else.

I am John Capitalism and I revoke the USA's permission to use my name until they crush labor share of income below 50%.

Not even just Republicans, unfortunately. The generation of Americans who grew up in the Cold War were inundated with propaganda about how socialism would destroy America, and then go and say things like this https://www.nytimes.com/2026/06/26/us/politics/moderate-demo...

Why wouldn't a single-payer solution work? The margin that the insurance companies take for themselves seems like a good place to start. From there it would spiral out to the third to half of time that all of the clinical staff spend just dealing with insurance issues and insurance billing.

You're citing some of the results of a runaway healthcare industrial complex, such as drug prices, as reasons why the thing that would keep such a complex from emerging won't work.

Employers might be contributing more to healthcare costs, but that's because they have to in order to keep coverage for their employees at all as premiums increase, and individual out-of-pocket costs are still rising as a result of coverage denial and high deductibles.

While healthcare spending isn’t included in some economic measures like wages (which has contributed to the distorted productivity-pay gap discourse), labor share as discussed in this article is actually calculated using total compensation, the “total of payments to labor to produce output, including wages, benefits, and other monetary or nonmonetary payments,” which includes employer contributions to medical care not just wages and salaries.[0] They do discuss payroll share later on though, which doesn’t include non-wage compensation.

[0] https://www.bls.gov/opub/hom/opt/calculation.htm

I've built and audited medical billing systems and billing practices. It isn't an economics issue in a traditional sense. Infact it would drastically reduce complexity of these systems and payments over time, even allowing private insurers to exist but have to compete with a base general coverage. (many smarter people than me at princeton did economics showing this worked out as a net less expensive than what we are doing now) The biggest reason why its not the simplistic solution, is politics of all the middle men (me) making exponential returns from solutions to these systemic issues.

Too much money in the system being flawed, look at pricing for any HIPAA safe products and thats just technology. Money is so hard to get for healthcare providers it is its own industry of revenue cycle management and thrid party billers. Most of these physician lead practices charge more is because planning your account around reemburcement cycles from insurance companies are 30-120 days if your lucky is an advanced accounting problem. (Thats excluding complexities of audits, LOPs, network rates etc.) Medicare/medicaid the fraud side has lots of tiny wins through leaning on tax information more, taking the model from the successful basic income studies and trials worked out.

Do other countries' state healthcare system costs count towards their labor share of income? If not, it seems sensible not to account for them that way in the US, or you're creating a much more serious apples and oranges problem for international statistics (which are often cited/compared for these figures)...

The data here would already include healthcare contributions.

> If we want to increase the labor share then we'll drive down healthcare spending.

It may not be simple but it's clear the United States is doing something catastrophically wrong. All the other healthcare systems on the planet in developed countries have problems, sure. But we spend magnitudes more money to receive middling-to-shit healthcare. Medical debt and bankruptcy is a unique American problem that also happens to be the most reliable way for otherwise productive and prosperous members of our society to end up fucking homeless. Because they got SICK. I rarely use the word "evil" but that really fits IMO.

Like you cannot tell me with a straight face that the insurance industry couldn't be blown the fuck off the map tomorrow and literally everyone who doesn't own an insurance company isn't instantly better off.

I strongly agree that socializing the healthcare industry will not help in any way. To the extent that healthcare costs have skyrocketed, it's precisely because of government intervention in the U.S. Healthcare industry has massively increased over the last 50 years, especially in the form of tax incentives for employers to compensate employees by way of health insurance. Anyway, with respect to the labor share of income, that is not correct. Employer contributions to employee health insurance premiums are included in the labor share.

Yeah, I guess the rest of the developed world doesn’t really ‘get it’ - fools!

> And no, there's no simple solution to this problem. The notion that something like "Medicare for All" would solve the problem is a total fantasy, disconnected from actual US healthcare economics. Any real solution will have to work on multiple angles including preventive care, PBMs, provider wages, rationing, drug prices, fraud, malpractice insurance, interoperability technology, etc.

I have been saying this for years. I'm so tired of social media memes turning into sage wisdom for an entire generation who can barely spell healthcare, let alone have any vague understanding of it.

I'm and-then'ing, not disagreeing, but the big healthcare cost fix, IMO, still centers around education cost reform, and fixing the supply of mid-levels+ across the country.

Removing a useless middleman party that needs a profit margin, and removing the perverse incentives of them having to prove their value thus having inflated prices with fake discounts, and centralising all healthcare purchasing power in a single entity, is absolutely going to solve a lot of challenges US healthcare faces

Is there a reference you can cite with corrected numbers? Honestly this sounds like excuse-making, especially when used as a jumping point into a decidedly partisan take (complete with scare quotes!) on the essentially unrelated subject of public health care financing.

The idea seems to have merit, but it's unconvincing to people outside your bubble and I'm dubious.