alt Hacker NewsThis is purely data with no narrative attached, which is sort of refreshing.
The un-answered question is what is now eating up the percentage that was going to wages?
What are the options? R&D, shareholders, lawyers, advertising/marketing/PR, share buy-backs, political lobbying (cough bribery cough), strategic reserves?
Replies
All (the value) of the things produced goes ultimately to either labor (wages), capital (interest), or land (rent) - Adam Smith. (tax being an intermediary for the same).
If wages are down then rent or interest returns are up.
Market interest rates are trending up in recent years but in line with / below long term averages.
So obviously rent is doing the heavy lifting. GFC, housing crisis, etc, are all products of the extreme rents and land speculation.
Where does rent go? It can be consumed (luxury goods, etc) but most of it 'grounds out' in labor and capital through subsequent investments.
So higher share going to rent actually looks like larger luxury consumption by the landowners, more services consumed by them, and (probably most significantly) larger capital investments domestically and internationally - huge AI and semiconductor investments, robotics and EV factory build outs, complicated R&D programs, etc). These go on to employ more laborers globally - with the key change being that the return to laborers within any one investment is historically low.
Money is only an intermediary. It is the flow of goods produced (machines built, technologies developed) and services and resources which really matters.
Naively, people have been working for 75 years over the span of the graph to create valuable IP, scalable manufacturing, unique organisational capabilities, partnerships etc.
If capital is being created faster than it degrades or is destroyed, wouldn't we expect its share of income to increase over time?
It's not obvious to me why labour's share should necessarily remain constant as the economy accumulates hard-to-replicate productive assets.
The economic accounting doesn’t map nearly into what you think of as “labor” and “capital.” For example, the non-labor share includes things like depreciation: https://taxfoundation.org/blog/capital-is-not-taking-half-of...
See also: https://itif.org/publications/2026/08/25/the-false-panic-ove...
Most income gets reinvested; the goal of modern large corporate accounting is to show a huge income, growth of sales, and near-zero profits. I suppose that the large revenues are also at least partly due to financial engineering, through structuring of subsidiaries, etc. Hence wages, which are real costs, look smaller compared to the large amounts of money sloshing around as huge revenues.
I don't think you understand the graph. This is what percentage of income comes from wages. So for every dollar that people earned as income on their tax sheet, 42% was listed as coming from wages. The other 58% comes from other sources like non-wage employer compensation, rental income, private business income, etc.
You can see the breakdown of the categories here:
there are only two ways to make money - labor and capital - broadly speaking, and continued data points like this one is why the word Oligarchy is increasing in usage... most of us see it and feel it
Wages for the upper tier, but not in the form of wages
We know it isn't R&D. That got done by universities, and we're in the process of gutting them.
> no narrative attached
That's just a style choice; like using "unalived" to mean the same physical state as "dead"
Muricans love to launder their willful and feigned ignorance behind made up terms to appear objective
It's still the same human story behind the words; a minority hordes all the loot and pays goons to shoot hungry people
> what is now eating up the percentage that was going to wages?
Here you go [1].
Wages and salaries are down 0.4 percentage points from ‘24, 0.75 from ‘15 and 5 from 2000 [2].
Corporate profits after taxes are up 5 percentage points from 2000, of which 2 percentage points went to dividend increases and 3 to undistributed profits. (Also of note, private consumption of fixed capital +2pp, same as rental income.)
[1] https://fred.stlouisfed.org/release/tables?rid=53&eid=42185 2025
[2] https://fred.stlouisfed.org/release/tables?rid=53&eid=42185&...