U.S. workers saw their share of the U.S. economy slide to a record low in the second quarter, according to the Bureau of Labor Statistics (BLS). The labor share of nominal gross domestic product, which BLS defines as the percentage of output that accrues to workers in the form of compensation, fell to 52.9% in the second quarter from 53.7% in the first quarter.
BLS said this was the lowest since the series began in 1947. The labor share has been falling for decades, due to different factors like the diminishing breadth and power of organized labor and globalization that shifted relatively high-paying manufacturing jobs to low-cost overseas production centers.
Previous reports mentioned the “labor share” has been on a downward trajectory since the second half of the 20th century and has continued to sink in the post-pandemic era, reaching an all-time low in 2026. Meanwhile, the overall U.S. economy has continued to expand, meaning that workers are getting a smaller slice of a larger pie.
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Recently, technology like automation and artificial intelligence has potentially allowed companies to increase output without substantially adding to headcount. This means that gains are benefitting business owners and shareholders than to workers.
Real weekly earnings, which measure wage growth against inflation, were essentially unchanged during the first half of 2026. The latest data for June snapped a three-month streak of declines and marked the strongest reading in six years.
Previous reports about the share of economic gains held by workers pointed to the phenomenon of “jobless growth.” Raymond Robertson, a labor economist at Texas A&M’s Bush School of Government, attributed weakening labor share averages to the rise in automation, which he noted is displacing workers, with productivity—a metric essentially measuring worker output—continuing to rise.
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Automation is expected to help corporate profits and GDP, expected to boost GDP by 1.5% by 2035, according to a Wharton brief published in September 2025. Some signs indicated AI is already driving productivity gains, with companies who invested $10 million or more in AI reporting significant productivity gains compared to organizations investing less in the technology, according to EY’s U.S. AI Pulse Survey.
Some researchers have also attributed the decline of unions, the rise of China as an economic power, and rising profit margins for businesses as reasons for the workers taking home a smaller share of economic gains.