Labor Share: A Reflection of Economic Equity

The labor share of national income, which represents the proportion of total income allocated to workers versus profits, has experienced significant fluctuations over the decades. During the mid-20th century, particularly from the 1940s to the 1970s, workers received a larger share—peaking at around 65%, contributing to a substantial increase in income for those at the bottom of the income scale. This era of progressive policies executed during those decades effectively reduced inequality, allowing trillions to flow to lower-income individuals rather than the wealthiest. However, since 1975, there has been a reversal of this trend, with the labor share declining to levels reminiscent of the Great Depression era. This shift highlights the connection between labor income distribution and economic policies affecting equity.