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TL;DR
U.S. workers received 53.0% of the value produced in the nonfarm business sector in the third quarter of 2026, according to the Bureau of Labor Statistics. The figure is the lowest in the series dating to 1947; international data also show a long-term decline in labor’s share, though neither source establishes a single cause.
Labor received 53.0% of the value produced in the U.S. nonfarm business sector in the third quarter of 2026, the lowest share since the Bureau of Labor Statistics began its series in 1947. The November 5 report measures how business income is divided between compensation for workers and returns to capital, but it does not identify a single cause for the decline.
The labor share includes wages, salaries and benefits, compared with the value added by businesses. The BLS measure covers the nonfarm business sector, around three-quarters of the U.S. economy. It also estimates the labor portion of self-employed workers’ income by assigning them the average hourly pay of employees in their industry.
The third-quarter figure was down from a revised 53.4% in the second quarter. The source account places the share at about 66% in 1960 and says it remained near 63% in 2000. It fell below 60% in early 2004 and averaged about 56% in 2011, before reaching the new low. These comparisons describe the share of sector value, not the change in any individual worker’s pay.
Outside the United States, the International Labour Organization estimated that the global labor income share fell by 1.6 percentage points from 2004 to 2024, including 0.6 points after 2019. The ILO said the decline corresponded to $2.4 trillion in labor income in 2024, measured in constant purchasing-power dollars. Its 2026 trends report put the global share at 52.6% in 2025, below the 2019 level of 53.0%.
Infographic 01 · The number to remember
53 cents of every dollar
How much of the value created in US businesses goes to the people who work there, 1947 to 2026.
US labour share · nonfarm business · % of value added (annual averages unless noted)
BLS publishes the series as an index (2017 = 100) and the latest level (53.0% in Q3 2026). The levels shown here are derived by scaling the index to that published level; they include an estimate of the labour income of the self-employed and use gross value added, so the capital side includes depreciation. Bars start at zero.
Sources: BLS, Productivity and Costs, Q3 2026 (5 Nov 2026); BLS labor share series PRS85006173 (via FRED).
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How the Income Split Shapes Pay
The labor share offers one view of who receives the income generated by businesses: workers through compensation, or owners and investors through profits, interest and rents, alongside capital depreciation. A sustained shift can matter for how the gains from production are distributed across the economy. The 53.0% reading signals a change in that aggregate split, not that every worker’s wages have fallen or that all of the remaining share became profit.
The scale also matters. The U.S. nonfarm business sector produces trillions of dollars in value, so a percentage-point movement represents a large sum. The ILO’s estimate of $2.4 trillion gives an international measure of the income associated with its calculated decline, although it is not an estimate of money transferred to any particular group or country.
For readers, the indicator is relevant to debates over wage growth, productivity and economic inequality. It is not, by itself, a direct measure of household living standards: it does not show how income is distributed among workers, how prices change, or how taxes and public transfers affect disposable income.
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A Measure Economists Once Saw as Stable
The division of economic output between labor and capital has been a central question in economics since at least David Ricardo’s 1817 book on political economy. In 1939, John Maynard Keynes described the apparent stability of labor’s share as one of the best-established facts in economic statistics. Nicholas Kaldor later listed a roughly stable labor share among the patterns growth theories should explain, although economist Robert Solow questioned the interpretation.
U.S. data appeared to support that stability for decades: labor received about 65% in 1947, reached 66.2% at the end of 1960 and remained near 63% in 2000, according to the figures in the source account. The subsequent decline makes the newer readings stand out against that historical pattern. The exact measure depends on how compensation, business output and self-employment income are defined.
The international picture is not uniform. The source account says Germany’s wage share rose to 73.5% in 2025, largely because profits and property income fell amid a stagnant economy. A higher labor share therefore does not necessarily mean that workers’ incomes rose; it can also reflect weaker income elsewhere in the calculation.
“To determine the laws which regulate this distribution, is the principal problem in Political Economy.”
— David Ricardo, 1817
The BLS figure records the division of sector value; it does not explain why the share fell. The source material points to changing technology as one possible contributor, citing ILO research that found evidence compatible with automation-oriented technological progress. That finding does not establish automation as the sole cause, and the material does not quantify its contribution to the U.S. result.
Other details also limit interpretation. The measure includes an estimate for self-employed workers, and its result depends on the sector and accounting definitions used. The data do not establish that a particular amount went directly to corporate owners, since the nonlabor portion includes depreciation, interest, rent and profits. The source material provides no further breakdown of the third-quarter U.S. figure by industry, worker group or cause.
The U.S. and global statistics should not be treated as identical: they use different coverage and methods. The provided information also does not state whether the BLS will revise the third-quarter estimate in later releases.
Future Releases Will Test the Trend
The next BLS productivity and cost reports will show whether the 53.0% reading is sustained, revised or followed by a rebound. Later quarterly data can help distinguish a continuing movement from a short-term change, but will not by themselves identify its causes.
Readers can also watch for further ILO updates on the global labor income share and for research that separates the effects of technology from other economic changes. Until such evidence provides more detail, the confirmed development is the record-low U.S. reading in the BLS series, while explanations for the longer decline remain open.
Key Questions
What does a 53.0% labor share mean?
It means labor compensation, including wages, salaries and benefits, accounted for 53.0% of value added in the U.S. nonfarm business sector in the third quarter of 2026, according to the BLS.
Is 53.0% the lowest U.S. reading on record?
Yes. The source reports that it is the lowest point in the BLS series, which begins in 1947.
Does the decline prove that automation reduced workers’ share?
No. The ILO reported evidence compatible with automation-oriented technological progress contributing to declines in labor income share, but that does not prove automation was the sole cause or establish its role in the U.S. third-quarter result.
Did workers lose 13 cents from every dollar of pay?
No. The comparison is about the share of business value going to labor: the source account puts it near 66% in 1960 and at 53.0% in the third quarter of 2026. It does not measure a 13-cent cut to each worker’s pay.
What happens next?
Future BLS releases will show whether the estimate is revised and whether the labor share continues to fall or changes direction. The available data do not yet establish what drove the latest reading.
Source: ThorstenMeyerAI.com
