The Big Money in Today's Economy Is Going To Capital, Not Labor

Source: Slashdot

Overview

The American economy’s most valuable companies are now worth trillions of dollars more than their predecessors were a generation ago, yet they employ a fraction of the workers. A new analysis by the Wall Street Journal argues that this widening gap between capital and labor is the defining economic story of our time.

• Labor received 58 % of gross domestic income in 1980; by the third quarter of 2025, that figure had fallen to 51.4 %.
• Corporate profits’ share rose from 7 % to 11.7 % over the same period.
• Nvidia, the most valuable U.S. company in 2026, is nearly 20 times as valuable as IBM was in 1985 (inflation‑adjusted) and employs roughly one‑tenth as many people.
• Since the end of 2019, real average hourly wages have risen 3 %, while corporate profits have climbed 43 %.
• Household stock wealth now equals almost 300 % of annual disposable income, up from 200 % in 2019.

Yale economist Pascual Restrepo predicts that AI integration will shrink labor’s share of revenue further, mirroring the impact factory automation had on blue‑collar workers in previous decades.