The Big Money in Today's Economy Is Going To Capital, Not Labor
9 97The American economy's most valuable companies are now worth trillions of dollars more than their predecessors were a generation ago, yet they employ a fraction of the workers -- and a new analysis by the Wall Street Journal argues that this widening gap between capital and labor is the defining economic story of our time.
Labor received 58% of gross domestic income in 1980; by the third quarter of 2025, that figure had fallen to 51.4%. Corporate profits' share rose from 7% to 11.7% over the same period. Nvidia, the most valuable US company in 2026, is nearly 20 times as valuable as IBM was in 1985 in inflation-adjusted terms and employs roughly a tenth as many people. Since the end of 2019, real average hourly wages have risen 3% while corporate profits have climbed 43%.
Household stock wealth now equals almost 300% of annual disposable income, up from 200% in 2019. Yale economist Pascual Restrepo predicted that AI integration will shrink labor's share of revenue further, just as factory automation did for blue-collar workers in decades past.
9 comments
Re:News? (Score: 5, Insightful)
by Zagnar ( 722415 ) on Tuesday February 10, 2026 @10:29AM (#65980114)
It's getting exponentially worse.
Re:the optimal fix is workweek, not taxation. (Score: 5, Insightful)
by Skjellifetti2 ( 7600738 ) on Tuesday February 10, 2026 @12:04PM (#65980334)
Raising corporate profit taxes, income taxes, and inheritance taxes is the way to go. Much of the distribution problem is a result of tax changes that benefit the wealthy which have been the policies of every Republican administration since Reagan.
Re:News? (Score: 5, Informative)
by Geoffrey.landis ( 926948 ) on Tuesday February 10, 2026 @10:34AM (#65980124)
This is the change: comparing 45 years ago to now.
In summary, labor received 6.6% less of the gross income, while corporate profits increased by 4.7%. So, 3/4 of the decrease in money paid to labor was moved to corporate profits.
Not terribly unexpected; the labor force dropped because of increased amounts of automation of production.
Re:exists because of immigration (Score: 5, Informative)
by ndsurvivor ( 891239 ) on Tuesday February 10, 2026 @10:39AM (#65980136)
Facts bear out that immigrants bump our GDP, and contribute more than they take.
If you are concerned about housing prices, and want a real fix, look at how the very wealthy own large percentages of housing, and keep jacking up the rent on working people.
ICE [Re:exists because of immigration] (Score: 5, Informative)
by Anonymous Coward ( None ) on Tuesday February 10, 2026 @10:55AM (#65980176)
The economic impacts of ICE operations in MPLS and other target locations also proving it. Places are closing up because they don't have workers, they don't have workers because they illegals won't turn up for shifts.
Partly true, but also legal immigrants aren't turning up for shifts because of fear of ICE. ICE has been very indiscriminate about who they detain, and also have been doing things like taking people who are legally in the US, changing their status, and deporting them.
Re:exists because of immigration (Score: 5, Interesting)
by nealric ( 3647765 ) on Tuesday February 10, 2026 @11:03AM (#65980196)
It's a tactic that owners of capital have been using for a very long time going all the way back to the slave plantation owners.
The vast majority of people in the American south could not afford slaves (let alone a plantation!). In order to cover for the fact that a tiny minority (maybe 1% of the population) controlled 99% of the wealth, they institute a system where whites were considered superior so that the working class could be convinced they weren't being screwed and would participate in the continuation of free labor for the plantation owners. After the civil war, they used Jim Crow to perpetuate the same system, albeit with slave wages rather than literal slavery from the designated underclass.
Once the Civil Rights era came about, it became no longer tenable to use African Americans as the designated underclass to keep the working class in line. It's no accident that immigration became a hot button political issue right around the time the civil rights era ebbed. Immigrants from Latin American became a convenient replacement. It was more socially acceptable to ostracize outsiders who spoke a different language and because of immigration laws, you could legally discriminate against them the way people used to discriminate against African Americans. The ginned-up outrage over "crime" and "sending rapists" mirrors how society used to talk about African Americans before that ceased to be acceptable.
The group that is the designated underclass has changed, but the result is the same: owners of capital get cheap labor. The underclass does the worst least-paid jobs with no real protections while the working class is distracted from the fact they only getting the crumbs from the capital owners. They are trained to blame those under them in the social order rather than the ones who have created the system. Note: having "illegal" immigrants is a feature, not a bug in this system. Undocumented immigrants still work, but only off the books. This means they will work for sub-minimum wage and the true employer can officially disclaim ever employing them (by hiring via a contractor). You also don't have to pay them social security or Medicare benefits down the line, but they often do pay into these systems.
Why does the gig economy exist? [Re:exists bec...] (Score: 5, Informative)
by Geoffrey.landis ( 926948 ) on Tuesday February 10, 2026 @10:44AM (#65980156)
The gig economy exists because of immigration,
No. The gig economy exists because it is a work-around capitalism has found to employ people without treating them as employees, and hence not giving them the benefits of employees.
and more so because illegal immigration.
Partly true. The illegal immigration part of the gig economy is primarily farm-work: seasonal labor hired by the hour (or by the bushel) to do things like picking crops. This is because this kind of work can be paid under the table with no records. But hiring migrant farmworkers, no questions asked, has been part of the underground economy for generations, although it's not what we usually think of when we think of the gig economy.
concentration of wealth (Score: 5, Informative)
by ZipNada ( 10152669 ) on Tuesday February 10, 2026 @11:16AM (#65980218)
Inflation is stubbornly high in the USA, the ridiculous tariffs are hugely damaging, housing costs have soared, it's hard to find a decent job, and consumer confidence has soured. The federal government is malicious and untethered.
Nonetheless, if you've had money invested in the stock market over the past couple of years you've made out like a bandit. My portfolio is up 8% just since the beginning of the year and its all just index funds. VYMI (international value category) is up 40% since this time last year, I should have been all in.
It seems completely uncoupled to the underlying economy, defying gravity. But that's where the obscenely wealthy keep much of their money, and if you have some surplus income you get to come along for the ride. If you don't, like so many people today, all you can do is watch from the sidelines.
Is this an argument for socialism? (Score: 5, Informative)
by fropenn ( 1116699 ) on Tuesday February 10, 2026 @11:58AM (#65980314)
Increasingly, the path to wealth is not running a company that employs lots of labor, but rather owning robots, equipment, and IP that produces with extremely low labor costs. But the problem is that, without income, who will purchase the output of these robots and equipment and IP? And if capital is increasingly in the hands of the wealthy, who are not spending much of that wealth, there will be a tipping point where it will all collapse because there will be tremendous production, with no labor, and therefore no market for that which is produced. Broader public ownership of production - particularly by those who are not wealthy - would address a huge part of this problem by allowing everyone to benefit from automation, not just the wealthy.