CEPR logo

Fact-based, data-driven research and analysis to advance democratic debate on vital issues shaping people’s lives.

Center for Economic and Policy Research
1611 Connecticut Ave. NW
Suite 400
Washington, DC 20009

Tel: 202-293-5380
Fax: 202-588-1356
https://cepr.net

Close

On This Page

An NYT Economix blognote overstated the effective decline in the labor share of national income over the last three decades by using gross national income rather than net national income. The note shares the labor compensation share declining by 4-5 percentage points over this period. 

However, the depreciation share of gross domestic product rose by roughly 2 percentage points over this period. If we assume that this increase came proportionately from the capital and labor share of income, then the rise in the depreciation share would lead to a 1.2 percentage point reduction in the labor compensation share of gross national income.

Much of the loss of income by ordinary workers has been due to increased pay of CEOs, doctors, and other highly paid workers. This is still included as part of labor income.