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Our K-shaped economy is growing K-er by the day.
Figures from the Bureau of Labor Statistics released earlier this month show that the labor share of the nation’s GDP hit the lowest point it’s been at since the BLS began measuring such things in 1947. In that year, the labor share—that is, the pay and benefits that American workers claimed—stood at 70 percent of the nation’s income, with the remaining balance going to profits and other investment income.
In the third quarter of 2025, the labor share stood at 53.8 percent. That means that the share of the nation’s income going to workers over the past 78 years has declined by roughly 16 percent, as the share going to investors has grown by the same amount.
A similar study by the RAND Corporation, as I noted in our current print issue, found that the share of the taxable income of the bottom 90 percent of wage earners constituted 67 percent of all such income in 1975, and just 46.8 percent of all taxable income in the last year (2019) for which they had the numbers. Extrapolating from RAND’s figures, I calculated that had that bottom 90 percent been able to retain their 1975 share of the nation’s taxable income, each of those workers would have seen their annual income boosted by $28,000. Now, the BLS is documenting the same upward redistribution of income and wealth that RAND did.
Actually, the BLS has been documenting this for decades, as this profound shift from rewarding work to rewarding investment in others’ work has been years in the making. Much of this shift is due to changes in capitalism: to globalization, which has brought down many incomes in developed economies; to financialization, in which corporations have come under greater pressure to reward investors at the expense of their employees.
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