Opinion
Mr. Neiman is a professor of economics at the University of Chicago.
TL;DR
- The labor share of income has declined for decades, reaching a record low of about 53 percent.
- Corporate profits have reached a record high, while the share of income paid to capital has risen.
- Some policymakers advocate for breaking up large firms to address declining labor share.
- The author contends that new technology, not just market power, is the main cause of the falling labor share.
- Replacing workers with machines (capital for labor) is identified as the force reducing labor's share.
- This decline was observed globally, even in countries with strong labor laws or unions.