U.S. Workers' Income Share Falls to 54.1%, Lowest Since 1947
Updated
Updated · CBS New York · Jun 30
U.S. Workers' Income Share Falls to 54.1%, Lowest Since 1947
1 articles · Updated · CBS New York · Jun 30
Summary
Federal Reserve analysis shows labor's share of U.S. national income dropped to 54.1% in early 2026, down from 57.7% in early 2020 and more than 65% in the postwar era.
That decline means a larger slice of economic output is flowing to profits, dividends and other capital income rather than wages, even as firms remain highly profitable.
Workers' share of corporate income also fell to 71.3% in the first quarter of 2026 from 77.8% at the start of 2020 and 79.1% in 1979, according to EPI analysis.
Economists cited decades of weaker collective bargaining and tax rules favoring capital; union membership fell to 10% last year from 20% in 1983, while the federal minimum wage has stayed at $7.25 since 2009.
The shift helps explain sour public sentiment: 48% of Americans said their finances were worse than a year earlier, and three-quarters said incomes were not keeping up with inflation.
As corporations spend trillions on stock buybacks, what could redirect that capital back into worker wages and long-term economic growth?
With the world’s first trillionaire on the horizon, what does this extreme wealth concentration mean for the financial stability of ordinary families?
America’s Labor Share at a 79-Year Low: Why Worker Compensation Is Lagging Behind Profits in 2026
Overview
In mid-2026, the U.S. labor share has reached a historic low, as real compensation for workers declines while corporate profits remain persistently high. Although real hourly compensation increased 1.4% year-on-year, it fell by 0.5% in the most recent quarter. At the same time, inflation is rising, with the PCE price index up 2.8% and core PCE inflation at 2.9%, further eroding workers' purchasing power. This combination of stagnant or falling wages and strong corporate profits means that labor's share of national income is shrinking, highlighting a growing imbalance in how economic gains are distributed.