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U.S. workers took home their smallest share of capital since at least 1947
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U.S. workers received 52.8% of national income in the second quarter of 2026, the lowest labor share since the Bureau of Labor Statistics began tracking it in 1947. The share fell from 53.6% in the prior quarter and below the decade’s 55.6% average. It marked a record low for the American workforce.
The decline came as corporate earnings and GDP climbed. Fortune 500 profits hit a record $2.1 trillion in 2025. U.S. GDP grew 3.4% in last year’s third quarter, beating forecasts.
Economists say the gap reflects a weakening labor market. Unemployment rose to 4.2% in September. Employers added 584,000 jobs in 2025, down from 2 million in 2024, and September’s 29,000 gain was one-third of projections.
Raymond Robertson, a Texas A&M labor economist, blamed a shift toward capital and automation. He said the falling share meant lower earnings or fewer workers. Nonfarm productivity grew 1.4% in the second quarter, down from 2.2% a year earlier.
Goldman Sachs analysts Joseph Briggs and Sarah Dong estimated AI automation could displace 25% of all work hours. They predicted a 15% AI-driven productivity increase could displace 6% to 7% of jobs and peak at 1 million more unemployed workers. New jobs would temper the impact, they said.
Automation is expected to lift profits and GDP. A Wharton brief projected AI could add 1.5% to GDP by 2035. McKinsey found 80% of employees say AI speeds tasks, but only 37% of companies see operating-profit impact.
Robertson expects unemployment to rise, keeping wages down and margins expanding. He warned current data consistently points to worse outcomes for workers and better ones for billionaires. The outlook remains jobless growth and a K-shaped economy, with gains concentrated at the top.
