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TL;DR
The U.S. Bureau of Labor Statistics reported that workers received 53.0% of value produced in the nonfarm business sector in the third quarter of 2026, the lowest share in its series dating to 1947. The figure measures the division of income between labor and capital; it does not establish that AI caused the decline. The global labor share has also fallen, according to the International Labour Organization, but the causes and future effects remain unsettled.
The U.S. Bureau of Labor Statistics reported that workers received 53.0% of value added in the nonfarm business sector in the third quarter of 2026, the lowest share in the series, which began in 1947. The measure tracks how income from production is divided between labor and capital; it does not show that artificial intelligence caused the decline.
The BLS figure includes wages, salaries and benefits and compares them with gross value added in the nonfarm business sector, which accounts for about three quarters of the U.S. economy. The remainder is attributed to capital-related income and costs, including profits, interest, rents and depreciation. The agency also estimates the labor component of income earned by self-employed workers, using average employee pay in their sector as a benchmark.
The third-quarter reading was down from a revised 53.4% in the second quarter. The labor share had reached 66.2% at the end of 1960 and was about 63% in 2000. The figures describe the distribution of measured income; they do not mean that each worker personally lost 13 cents from every dollar earned, nor do they identify exactly who received each portion assigned to capital.
The global pattern is also downward, though the measures and time periods differ. The International Labour Organization estimated that the global labor income share fell 1.6 percentage points from 2004 to 2024, including 0.6 points after 2019. It said the decline corresponded to $2.4 trillion in labor income in 2024, expressed 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 Income Is Split Between Workers and Owners
The labor share matters because it offers a broad measure of how economic output is divided between people who work and those who own productive assets. A sustained decline can mean that pay and benefits are growing more slowly than measured output, while a larger portion is recorded as capital income and depreciation. Since the sector produces trillions of dollars in value, even a percentage-point shift represents a large amount of income across the economy.
That distribution can affect household earnings, business profits, tax receipts and the bargaining position of workers. But the aggregate statistic cannot show how gains and losses are spread among workers, industries or households. It also cannot by itself establish whether the change reflects technology, market concentration, shifts between industries, changes in prices, or other forces. For readers weighing claims that AI is directing economic gains to owners rather than workers, the report supplies a relevant trend, not proof of an AI effect.
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A Long-Standing Economic Measure
The division of national income between wages, profits and rents has been a central economic question since at least David Ricardo’s 1817 book, which described distribution among landowners, capital owners and workers as a principal problem of political economy. In the 20th century, economists including John Maynard Keynes and Nicholas Kaldor pointed to the apparent stability of labor’s share as a feature growth theories needed to explain.
U.S. data seemed to support that view for decades: labor received roughly two thirds of nonfarm business value from the late 1940s through much of the late 20th century. The pattern weakened after 2000. The share first fell below 60% in early 2004 and averaged about 56% in 2011, according to the figures presented in the source material. The latest reading extends that decline, but the record is specific to the BLS nonfarm business measure and should not be treated as a direct measure of every worker’s income.
International comparisons require care. The ILO’s global series includes an estimate for self-employed workers and covers a different population and period from the BLS U.S. series. Its report also found that Germany’s wage share reached 73.5% in 2025, largely because profits and property income fell amid a stagnant economy. That example shows why a higher labor share does not automatically mean wages rose: the ratio can increase when capital income weakens.
“To determine the laws which regulate this distribution, is the principal problem in Political Economy.”
— David Ricardo, On the Principles of Political Economy, and Taxation (1817)
The BLS release establishes the latest level of the U.S. labor share, but the figures provided do not identify the causes of its long-term decline. The source material cites ILO research finding, from data covering 2003 to 2019, evidence compatible with automation-oriented technological progress contributing to lower labor shares. That finding is not a measure of AI’s specific effect, and it does not establish that AI drove the U.S. third-quarter 2026 result.
It is also unclear from the reported aggregate how much of the change reflects wages and benefits, changes in business composition, profits, depreciation, or the treatment of self-employed income. The figures do not break down the result by industry or show which workers may have gained or lost. The BLS series measures the nonfarm business sector, not the full economy, and the global estimates use a separate methodology.
Future Reports Will Test the Trend
Subsequent BLS productivity and cost reports will show whether the 53.0% reading persists, changes or is revised. Those releases can clarify the trajectory of the U.S. series, though they will not alone explain the forces behind it. A stronger account of AI’s role would require evidence connecting adoption to changes in output, compensation, employment and income distribution across businesses and industries.
The ILO’s later estimates can provide an updated global comparison, while national data and industry-level research may help distinguish technology effects from other economic changes. Until that evidence is available, the confirmed finding is a record-low labor share in the BLS series, not a settled explanation for why it reached that level.
Key Questions
What does a 53% labor share mean?
It means labor compensation—including wages, salaries and benefits—was measured as 53.0% of gross value added in the U.S. nonfarm business sector in the third quarter of 2026. It is an economy-wide ratio, not the share of each individual worker’s pay.
Is this evidence that AI is reducing workers’ share?
No. The BLS figure records the labor share but does not identify a cause. The source material cites ILO research that found evidence compatible with automation-oriented technology contributing to declines in earlier data, but that does not establish AI as the cause of this U.S. result.
How does the figure compare with earlier years?
The series stood at 66.2% at the end of 1960 and about 63% in 2000. It fell below 60% in early 2004, averaged about 56% in 2011, and reached 53.0% in the third quarter of 2026.
Did the global labor share also fall?
Yes. The ILO estimated a 1.6-percentage-point decline from 2004 to 2024 and put the global share at 52.6% in 2025, below its 2019 level of 53.0%. Its global estimate uses a different scope and methodology from the U.S. BLS series.
What happens next?
Future BLS reports will indicate whether the U.S. reading continues, changes or is revised. More detailed evidence is needed to identify the roles of AI, other technologies, industry shifts and changes in business income.
Source: ThorstenMeyerAI.com
