U.S. workers' share of national income falls to lowest level since 1947
Bureau of Labor Statistics data shows the share of U.S. economic output paid as wages and salaries fell to 52.8% in the second quarter of 2026. Economists link the trend to automation and immigration policy.
The share of U.S. economic output that goes to workers as wages and salaries fell to 52.8% in the second quarter of 2026, according to the Bureau of Labor Statistics (BLS), the federal agency that tracks labor data. It is the lowest figure since the agency began recording the measure in 1947. The previous quarter stood at 53.6%, and the average this decade is about 55.6%. The decline comes as corporate profits and gross domestic product keep rising.
Profits climb, hiring does not
Profits at Fortune 500 companies reached a record $2.1 trillion in 2025, and U.S. GDP grew 3.4% in the third quarter last year, beating economists' forecasts. Yet unemployment rose to 4.2% in September, and employers added only 584,000 jobs in 2025, compared with 2 million in 2024. September brought 29,000 new jobs, about a third of what economists expected.
Raymond Robertson, a labor economist at Texas A&M's Bush School of Government, says the falling labor share reflects a shift toward capital. He ties this to automation, as productivity continues to rise. Goldman Sachs analysts estimate AI automation could displace 25% of all work hours, though they expect many new jobs to soften the impact. Such displacement has not yet shown up meaningfully in economic data. Morgan Stanley economists say the recent productivity gain is an open question and may be cyclical rather than caused by AI.
Immigration policy
Mark Regets, a senior fellow at the National Foundation for American Policy, argues that President Donald Trump's immigration crackdown has not raised employment of U.S.-born workers, as administration officials had said it would. The foundation's data shows the foreign-born workforce has shrunk by 1.1 million to 1.4 million since January 2025. Labor participation among foreign-born workers slipped from 66.3% to 66% over a year, and among native-born workers from 61.6% to 60.9%.
Robertson says investment in skills and retraining is essential. Without changes, economists expect hiring to keep slowing, with growing concern over whether the economy can sustain its growth.
