labor income share

Labor income share describes how a country's total earnings, pictured as one big pie, get sliced up—specifically, how large the slice going to workers' wages is. The rest of the pie flows to corporate profits or capital income. When this share is high, more of the growth goes to workers; when it's low, more flows to companies and shareholders.

Even as the pie itself grows, the way it gets divided doesn't automatically become fairer. When productivity rises and the overall pie expands, that extra growth often flows into wider corporate margins before it shows up as higher wages. This tendency is especially pronounced when new technology emerges, since large, capital-intensive firms tend to capture the gains first.

In articles, this appears as a figure like "the labor income share stood at 52.8%, the lowest level since 1947." That means the portion of total income generated by the US economy that went to workers was the lowest on record. In contrast, corporate margins hit an all-time high of 14.9% of GDP—and these two figures are cited together to show that the gains from rising productivity flowed disproportionately to companies rather than workers. It's used as evidence for the warning that AI-driven productivity gains don't automatically translate into higher wages for workers.