Press Release Economic Growth United States Workers

The Over-Hyped Decline in Labor’s Share of GDP

November 05, 2019

Contact: Karen Conner, (202) 293-5380 x117Mail_Outline

November 5, 2019

For Immediate Release: November 5, 2019
Contact: Karen Conner, (202) 293-5380 x117, [email protected]

Washington, DC — The vast majority of people get most or all of their income from working. That’s what alarms economists who are puzzled by the drop in labor’s share of Gross Domestic Product (GDP). In today’s CEPR Blog, senior economist Dean Baker clarifies what looks like a decline in labor shares to find clarity.

Baker writes, “…if the economy remains healthy, the labor share is likely to continue to increase due to rising wages, and if it falls into a recession, it is likely to rise due to falling profits. Either way, it does not look like we will have much of a story of falling labor shares.”

GE 2019 10 Labor Share Baker600x450

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