U.S. — American workers received 54.1% of national income as of early 2026, marking the lowest labor share since at least 1947, according to research from the Federal Reserve Bank of New York. The labor share of income measures the portion of the nation's economic output distributed to workers as wages and salaries.

This figure reflects a decline from early 2020, when the labor share of income was 57.7%. Historically, the labor share of income exceeded 65% almost 80 years ago, following World War II, when data collection began. Similarly, workers received 71.3% of corporate income in the first quarter of 2026, a decrease from 77.8% at the start of 2020. In 1979, workers' share of corporate income stood at 79.1%.

Inflation reached its highest level in more than three years in May. Nearly three-quarters of Americans indicated their incomes were not keeping pace with inflation, according to a May poll. Approximately 48% of Americans reported their financial situation was worse in May compared to a year prior, which is the highest percentage since January 2023.

Josh Bivens, chief economist, stated, "You've got a lot of people who seem to work for firms that, in the aggregate, seem to be doing really well." He added, "They're very profitable, and yet [workers'] wages aren't growing particularly fast relative to how fast the firms are growing." Bivens said, "A lot of people look up after 10 years of working and just feel like they have not gained as much ground as they want to."

Angela Hanks, chief of policy programs, said, "You see this chart, and you immediately understand why consumer sentiment is so low — you understand why, at 4% unemployment, people are pessimistic about the economy." She said, "Even if you have a job, even if you feel like your household is relatively stable, you do feel this underlying precarity at all times." Credit card delinquencies across the U.S. have reached their highest level in 15 years.

Hanks said, "People are increasingly using debt as a way to make ends meet — we have record-high credit card debt, auto debt." She added, "People are falling into delinquency and default at concerning rates, and are using these products not for extravagant purchases, but just to get by and make ends meet."

Union membership fell to 10% of all U.S. workers last year, according to the Center for Economic and Policy Research, down from 20% in 1983. Bivens pointed out that the federal minimum wage remains at $7.25 an hour, a rate established in 2009. He said, "A good symbol of this is the value of the federal minimum wage — it's the lowest today in inflation-adjusted terms than it's been in about 50 years, and that's just a clear symbol that boosting wages for typical workers has not been a policy priority."

Why It Matters

The declining labor share of income indicates a shift in the distribution of economic gains, with a smaller portion of national income going to workers. This trend occurs as many American households report financial difficulties, with incomes not keeping pace with inflation and an increase in credit card delinquencies. The reduction in union membership and the stagnant federal minimum wage, which has remained unchanged since 2009, are factors that affect workers' ability to negotiate for higher wages and improved conditions.