Labor’s Declining Share Is Worrisome and Mysterious
The percentage of economic output that workers receive as compensation has been shrinking for decades, not just in the US but worldwide, and no one knows why.
Why are they getting smaller piece of the pie?
Photographer: Mark Ralston/AFP via Getty Images
There is some bad news afoot for workers. Labor’s share of the US gross domestic product has been falling for a long time, by seven percentage points since World War II. The labor share for 2022 — depending on exactly which measure is used, it comes in at slightly more than 60% — is the lowest measured since 1929.
And it’s not just America. Globally, the labor share, which is the fraction of an economy’s output that goes to workers, has declined by six percentage points since 1980. The numbers suggest that the share of labor is declining in 13 of the 16 wealthiest countries in the world.