The US economy has been growing faster than expected in recent months. Unemployment remains historically low. And the stock market has hit all-time highs recently, boosting 401(k) and investment account balances.
By several major metrics, the economy is doing quite well. But most Americans don’t feel like they’re winning. What gives?
The latest consumer sentiment readings from the University of Michigan and The Conference Board show an improvement in June as gasoline and oil prices eased from increases following the start of the Iran war. Still, Americans remain pessimistic.
This disconnect between what everyday Americans feel and what the economic data shows has been called “vibecession.” However, a recent report by the New York Federal Reserve Bank suggests that it’s not just the vibes that are off. American workers are not benefiting from the US economic growth as they once did.
In fact, they lost a lot of ground.
In the NY Fed report, researchers emphasized that the so-called “labour share” has come down. This measure represents the share of total income earned by workers in wages and salaries.
In the first three months of 2026, the share fell to 53.7% – the lowest record since 1947.
Employees get a smaller piece of the pie
After World War II, US workers earned more than 65% of the country’s income. Their share hovered above 60% in the early 2000s before falling steadily since the dot-com boom and since the 2008 Great Recession.
The COVID-19 pandemic deepened the downturn, and the NY Fed report concluded that the trend is not an irreversible one. Rather, it is an acceleration of something that has plagued workers for decades.
“It looks like across all industries the share of labor is going down,” Richard Audoly, one of the authors of the NY Fed report, told S&P Global.
And if the share of labor decreases, that means it increases for others. In this case, experts say, companies and investors see huge benefits in the form of higher profits and bigger profits.
According to separate data from the US Department of Commerce, the share of income that goes to corporate profits has reached 12.2% – the highest since at least 1929, when the government began collecting such statistics.
There are several reasons why the share of income is shrinking for workers, explains economist Raymond Robertson. Good luck earlier this year. All boil down to fewer workers or depressed wages.
For example, some companies are investing in artificial intelligence over humans. Megacorporations pay the CEO and raise the prices. Meanwhile, the number of workers (and the population) is decreasing due to the influx of fewer immigrants into the country.
“The data right now is very mixed,” Robertson said. “But I think it also all points to this idea that things are getting worse for workers and better for billionaires.”
