Labor’s share of US income has fallen to 52.8%, the lowest reading since the government began tracking it in 1947, while corporate margins reached a record 14.9% of GDP, according to EY-Parthenon chief economist Gregory Daco. The productivity gains driving that divergence mostly predate AI and trace back to a decade of automation, a pullback in hiring after post-pandemic overstaffing, and capital spending. Economic output rose 1.7% last quarter on just 0.3% more hours, but compensation rose 2.6%, which after months of oil-driven inflation works out to flat or slightly negative in real terms. All AI has contributed so far is more concentration, and Daco told Fortune he sees no floor under labor’s share, not even 50%.
