Why Labor's Share of Wealth Is Shrinking

Labor's share of wealth is shrinking because labor's share of productivity is shrinking.

gift link: https://www.nytimes.com/2026/09/07/opinion/labor-capitol-wor...

I've agreed with this conclusion for a while: the decline in labor's share of income is mostly due to automation, broadly construed. And this has probably been a consistent trend back through human history, and beyond.

E.g. when deciding whether to cooperate with, or murder, your fellow homo erectus, murder becomes more attractive if they had a hand axe that you could just take and use yourself just as well.

The trend is just nonlinear and that is becoming more obvious as it approaches the asymptote.

Because productivity is increasing due more to capital than labor.

in an ideal society labor's share would be near 0 because nearly 0 labor would be done. (eg machines do almost all the work ever done)

While many (in America, at least) have been focused on keeping and giving jobs, ultimately what we might need is to invent a newer and better distribution mechanism, alongside a total re-envisioning of entrepreneurship[1] in a way that makes it accessible to >60% of the population, that is to the current labor participation rate. While I don't quite want to end up like the humans in Wall-E (the movie), I do think removing even more people from BS jobs and machine like work in factories will allow even more of the population to do the higher order work that is more satisfying like creating, science, music, arts, and another kind of good -- time spent creating human connection and bonding which enriches life beyond the first $100K or so.

[1] - right now startup entrepreneurship is practically a cult, and full of culture that is contrary to the facts. Just to preempt the haters for example here's the data that are hand wave rejected by the cult. The data on hours worked versus productivity, 4 day work weeks, age of successful business founders, venture and hedge capital companies themselves being better investments than the investments which they make

I feel like the endless waves of buy outs & corporate consolidation means that there are less enterprising folks out there with high-end labor demand, less push for the ingenuity that often comes coupled with skillfully labor. The want now is all too broadly that of Taylorism, a man explicit "we anti-care what working here is like and what our employees see or learn". Labor is being not only replaced by mechanization/automation via technology, but labor is itself being mechanized, turned from a holistic or work engagement (to cite Franklin's dichotomies of technology), to prescriptive and control engagement, a scripted part expected only to function as a cog until broken & replaced. It's not good.

As well as being terrible for labor this engagement is forsaken for products/consumers too. The ecosystem diversity of companies doing things shrinks and shrinks and shrinks. Few governments seem willing and able to support people getting started, and costs like health care daunt all prospects of trying stuff. Kamala Harris had a bunch of plans here but well whatever I guess. The result is monopoly systems with ever enshittifying products (which is what Schelling just quit Apple over, not wanting to be part of the new app store pillaging Ternus is gearing up for), and stagnant innovation, lack of response to market demand.

We are so deeply far into an age of incredible fantastic ossification. Stasis and balance and stability is a wonderful thing, cherished, these enclaves of stability, and corporations are set to be super malthusian never dying super entities with unlimited political spending. They are the apex predator now and they are eating all the young.

These lessons are writ and the conclusions clear in Piketty's Capital in the 21st Century. Society must tax. Aggrssively. Not because of the revenue, not because it will fuel our society (it wiuld not really that big a drop vs what society already pays). No, we must tax to check the unlimited uncontested growth of money and wealth that has nothing to do in it's idle massive accumulation but to influence and steer and shape government.