U.S. Labor Share of Income Drops to Lowest Level Since 1947

The American workforce is capturing a historically small fraction of national economic output, even as corporate earnings and GDP reach unprecedented heights. According to the Bureau of Labor Statistics' productivity and costs report, the labor share—the portion of economic output received via wages and salaries—dropped to 52.8% in the second quarter of 2026, hitting the lowest level recorded since the agency began tracking the metric in 1947.

This follows a reading of 53.6% in the previous quarter and sits well below the decade's average of roughly 55.6%. The contraction occurs against a backdrop of surging corporate wealth, highlighted by Fortune 500 profits hitting a record $2.1 trillion in 2025 alongside robust GDP expansion. Economists warn that this structural shift impacts both worker wealth distribution and long-term workforce participation rates.