The Big Money in Today's Economy Is Going To Capital, Not Labor (wsj.com)
- Reference: 0180765814
- News link: https://slashdot.org/story/26/02/10/1438213/the-big-money-in-todays-economy-is-going-to-capital-not-labor
- Source link: https://www.wsj.com/economy/jobs/capital-labor-wealth-economy-2fcf6c2f
Labor received 58% of gross domestic income in 1980; by the third quarter of 2025, that figure had fallen to 51.4%. Corporate profits' share rose from 7% to 11.7% over the same period. Nvidia, the most valuable US company in 2026, is nearly 20 times as valuable as IBM was in 1985 in inflation-adjusted terms and employs roughly a tenth as many people. Since the end of 2019, real average hourly wages have risen 3% while corporate profits have climbed 43%.
Household stock wealth now equals almost 300% of annual disposable income, up from 200% in 2019. Yale economist Pascual Restrepo predicted that AI integration will shrink labor's share of revenue further, just as factory automation did for blue-collar workers in decades past.
[1] https://www.wsj.com/economy/jobs/capital-labor-wealth-economy-2fcf6c2f
exists because of immigration (Score:1)
The gig economy exists because of immigration, and more so because illegal immigration.
We need to fix the wage gap! You can tinker all you like with labor laws and regulations but ultimately supply and demand win.
If want to continue to have an America where upward mobility is possible, and we have a robust middle class work needs to pay. That simply will not happen when you have damn near unlimited supply of below market rate labor streaming over the boarder, while also collecting subsidies for housing and
Re:exists because of immigration (Score:5, Insightful)
I don't think that facts bear out your hypothesis. But you did manage to find a minority group to hate. You fell for the propaganda of the Rich.
Re: (Score:3)
Housing prices over the past year do.
The economic impacts of ICE operations in MPLS and other target locations also proving it. Places are closing up because they don't have workers, they don't have workers because they illegals won't turn up for shifts. They don't have legal residents for those positions because they don't pay enough. Legal residents are then pushed strait into the arms of the mega corps where they are also underpaid but at least they can show their employed and collect welfare that way.
Re:exists because of immigration (Score:5, Informative)
Facts bear out that immigrants bump our GDP, and contribute more than they take.
If you are concerned about housing prices, and want a real fix, look at how the very wealthy own large percentages of housing, and keep jacking up the rent on working people.
Re: (Score:1)
So you've also fallen for the propaganda of the Trump administration.
The vast majority of the people being pulled off the streets to make Miller's quotas have legal status.
ICE [Re:exists because of immigration] (Score:3, Insightful)
> The economic impacts of ICE operations in MPLS and other target locations also proving it. Places are closing up because they don't have workers, they don't have workers because they illegals won't turn up for shifts.
Partly true, but also legal immigrants aren't turning up for shifts because of fear of ICE. ICE has been very indiscriminate about who they detain, and also have been doing things like taking people who are legally in the US, changing their status, and deporting them.
Re: (Score:2)
If a place can't find workers willing to work for a wage that would make the business profitable, that business should not exist. "Illegals" are bound to the same reality as everyone else: they need to eat, and they need money to buy food, and they need jobs to get money. If you think this does not apply to them, and they are somehow getting a better deal than you are from the government, you should just do what they do and don't provide any documentation to the government about your citizenship when you
Re:exists because of immigration (Score:5, Interesting)
It's a tactic that owners of capital have been using for a very long time going all the way back to the slave plantation owners.
The vast majority of people in the American south could not afford slaves (let alone a plantation!). In order to cover for the fact that a tiny minority (maybe 1% of the population) controlled 99% of the wealth, they institute a system where whites were considered superior so that the working class could be convinced they weren't being screwed and would participate in the continuation of free labor for the plantation owners. After the civil war, they used Jim Crow to perpetuate the same system, albeit with slave wages rather than literal slavery from the designated underclass.
Once the Civil Rights era came about, it became no longer tenable to use African Americans as the designated underclass to keep the working class in line. It's no accident that immigration became a hot button political issue right around the time the civil rights era ebbed. Immigrants from Latin American became a convenient replacement. It was more socially acceptable to ostracize outsiders who spoke a different language and because of immigration laws, you could legally discriminate against them the way people used to discriminate against African Americans. The ginned-up outrage over "crime" and "sending rapists" mirrors how society used to talk about African Americans before that ceased to be acceptable.
The group that is the designated underclass has changed, but the result is the same: owners of capital get cheap labor. The underclass does the worst least-paid jobs with no real protections while the working class is distracted from the fact they only getting the crumbs from the capital owners. They are trained to blame those under them in the social order rather than the ones who have created the system. Note: having "illegal" immigrants is a feature, not a bug in this system. Undocumented immigrants still work, but only off the books. This means they will work for sub-minimum wage and the true employer can officially disclaim ever employing them (by hiring via a contractor). You also don't have to pay them social security or Medicare benefits down the line, but they often do pay into these systems.
Re: (Score:2)
> I don't think that facts bear out your hypothesis. But you did manage to find a minority group to hate. You fell for the propaganda of the Rich.
True. The [1]myth of trickle-down economics [theguardian.com] has long been debunked. But the idea that the rising tide of GDP will raise all boats is still peddled by many politicians and parts of the mainstream media,
[1] https://www.theguardian.com/commentisfree/2014/jan/20/trickle-down-economics-broken-promise-richest-85
Why does the gig economy exist? [Re:exists bec...] (Score:3)
> The gig economy exists because of immigration,
No. The gig economy exists because it is a work-around capitalism has found to employ people without treating them as employees, and hence not giving them the benefits of employees.
> and more so because illegal immigration.
Partly true. The illegal immigration part of the gig economy is primarily farm-work: seasonal labor hired by the hour (or by the bushel) to do things like picking crops. This is because this kind of work can be paid under the table with no records. But hiring migrant farmworkers, no questions asked, has been part of the undergrou
Re: (Score:2)
> The gig economy exists because it is a work-around capitalism has found to employ people without treating them as employees, and hence not giving them the benefits of employees.
The gig economy is a work-around for wage and benefit taxation. Gig workers are basically sole proprietor businesses. Who (if they are smart) can take advantage of the tax and other regulations which have an admittedly anti-labor, pro-business bias.
I don't want to be an employee. The tax and other economic advantages of being self employed are just too great. But the federal government and my (blue) state conspire to make that difficult. People keep telling me "Oh, but you really WANT those yummy benefits
Re: (Score:2)
> below market rate labor
The market rate is by definition the rate the market pays. The problem is you expect people already living here to be paid above market rate to do things that are economically not worth doing in the first place.
1960 called, they wan't their headline back. (Score:3)
EOM
Capital per employee (Score:1)
The current value of capital per employee is $227K for the US economy. Up 44% from $158K 10 years ago.
Re: (Score:2)
According to [1]this inflation calculator [usinflatio...ulator.com], 2015's $158k would now have be 2025's $214.61. So the actual change is 6%, not 44%.
[1] https://www.usinflationcalculator.com/
It's because of policy (Score:2)
IMO the workers used to have a voice, policy would be created in their favor. Now big money is all the politicians hear, if there was better policy preventing money from going to the top of the economic food chain and better serving workers, we wouldn't be where we are today.
Labor is becoming irrelevant. (Score:2)
It used to be workers had some leverage because they were essential to keeping the gears of the economy turning. Now, it's only the machines, databases, and AI that matter. The small amount of labor required to keep businesses functioning means workers are quickly becoming an irrelevant component of the economy. Good luck with that next wage negotiation.
concentration of wealth (Score:4, Interesting)
Inflation is stubbornly high in the USA, the ridiculous tariffs are hugely damaging, housing costs have soared, it's hard to find a decent job, and consumer confidence has soured. The federal government is malicious and untethered.
Nonetheless, if you've had money invested in the stock market over the past couple of years you've made out like a bandit. My portfolio is up 8% just since the beginning of the year and its all just index funds. VYMI (international value category) is up 40% since this time last year, I should have been all in.
It seems completely uncoupled to the underlying economy, defying gravity. But that's where the obscenely wealthy keep much of their money, and if you have some surplus income you get to come along for the ride. If you don't, like so many people today, all you can do is watch from the sidelines.
News? (Score:1)
This has been the last 50 years. How is this news at this point? It was stuff that matters 50 years ago.
Re:News? (Score:5, Insightful)
It's getting exponentially worse.
the optimal fix is workweek, not taxation. (Score:2)
the wealth taxes proposed In NY, WA and NYC are bad paths.
[1]https://www.scry.llc/2025/09/0... [scry.llc]
"The large IT companies are now in a consolidation phase accelerated by AI, as evidenced by continuous layoffs for the past three years. The average recession length is less than a year, this is structual change, not inventory adjustment. I'm curious if the Republicans will figure this out before the economy forces their hand."
adjusting the workweek is the optimum long-term fix.
[1] https://www.scry.llc/2025/09/09/workweek-review/
Re: (Score:2)
adjusting the workweek just means people are even less employed, shut the hell up
Re: (Score:3)
This is the change: comparing 45 years ago to now.
> Labor received 58% of gross domestic income in 1980; by the third quarter of 2025, that figure had fallen to 51.4%. Corporate profits' share rose from 7% to 11.7% over the same period.
In summary, labor received 6.6% less of the gross income, while corporate profits increased by 4.7%. So, 3/4 of the decrease in money paid to labor was moved to corporate profits.
Not terribly unexpected; the labor force dropped because of increased amounts of automation of prod
Re: (Score:3)
Leading to this interesting statement: "Household stock wealth now equals almost 300% of annual disposable income, up from 200% in 2019."
So many people are paper multi-millionaires now. I wonder if all this 'wealth' will be worth anything when we all go to spend it.
Re: (Score:2)
Yes, that's my concern. Ordinary people have their retirement plans largely in stocks. There will be a way to raid that.
The ultra wealthy seem to leverage many more kinds of asset - art, property, IP, companies they privately own etc.
Re: (Score:2)
The whole reason other people don't have money is those people do not intend to spend it, ever. Their entire project is to sit on money that they intentionally make increasingly useless until everyone else is starved to death.
Re: News? (Score:2)
It's even simpler. The entire point of capital hiring labor is that labor can produce more of value than they are paid. And over the years, capitalists have gotten an increasing discount. Although I would like to see this calculates with the total compensation, including employer's portion of healthcare. Probably won't move the number much though.
Equilibrium (Score:2)
yes, we're watching an historical cycle play out so answers already exist.
[1]https://www.scry.llc/2025/01/2... [scry.llc]
"Production equals consumption in an ideal economy. Both are bound by finite time. If production increases, consumption must increase, too. Ergo, time spent on production must fall, which is what happened during the last two depressionary eras. 1873-1897 and 1930-1940. I'm fairly sure that AI is the last straw which breaks the forty-hour workweek"
[1] https://www.scry.llc/2025/01/27/equilibrium/
While not news to some of us (Score:2)
It bear repeating as long as people remain in denial.