June 01, 2021
I thought it was worth highlighting the drop in the profit share of corporate income reported for the first quarter of 2021. It did rise slightly from the 2020 average, but it is below the 2019 level. This means that, in spite of the high unemployment in 2020, the wage share actually rose slightly. (The graph is showing annual data, except for the first quarter of 2021.)
Source: Bureau of Economic Analysis and author’s calculations.
If we can maintain a tight labor market going forward, the wage share is likely to continue to rise, making up the ground lost in the Great Recession.