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Everyday Money

The Economy Is Doing Great — for Everybody but Workers

By Adam Hardy MONEY RESEARCH COLLECTIVE

Workers are getting a record-low share of economic growth despite a strong economy.

Money; illustration AI-generated using Claude

The U.S. economy has been growing faster than expected in recent months. Unemployment remains historically low. And the stock market has hit several all-time highs lately, boosting 401(k) and investment account balances.

By several major metrics, the economy is doing quite well. But many Americans don’t feel like they’re winning. What gives?

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The latest consumer sentiment readings from the University of Michigan and The Conference Board show an improvement in June as gas and oil prices retreated from the spike following the start of the Iran war. Even so, Americans remain notably pessimistic.

This disconnect between what everyday Americans are feeling and what economic data shows has been referred to as a “vibecession.” However, a recent report from the New York Federal Reserve Bank suggests that it’s not just the vibes that are off. U.S. workers are not benefiting from U.S. economic growth as they once did.

In fact, they’re losing considerable ground.

In the NY Fed report, the researchers highlighted that the so-called “labor share” has hit an all-time low. This measure represents the share of all income that goes to workers through wages and salaries.

For the first three months of 2026, the share fell to 53.7% — the lowest on record dating back to 1947.

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Workers get a smaller piece of the pie

Following World War II, U.S. workers received more than 65% of the national income pie. Their share stayed above 60% into the early 2000s before falling steadily from the dot-com bust and again from the Great Recession in 2008.

The COVID-19 pandemic deepened the decline, and the NY Fed report concluded that the trend isn’t a blip that appears likely to reverse. Rather, it’s an acceleration of a persistent phenomenon that’s been plaguing workers for decades.

“It looks like across all industries the labor share is coming down,” Richard Audoly, one of the authors of the NY Fed report, told S&P Global.

And if the share for workers is shrinking, that means it’s growing for others. In this case, experts say, corporations and investors are seeing major gains in the form of higher profits and larger dividends.

According to separate data from the U.S. Commerce Department, the share of income resulting in corporate profits hit 12.2% — the highest since at least 1929, when the government first began collecting those figures.

There are several reasons why the slice of the income pie has been shrinking for workers, explained labor economist Raymond Robertson to Fortune earlier this year. They all boil down to fewer workers or suppressed wages.

For instance, some firms are investing in artificial intelligence over people. Megacorporations are padding CEO pay and raising prices. Meanwhile, the overall labor force (and population) is shrinking due to fewer immigrants entering the country.

“Data right now is very mixed,” Robertson said. “But I think it also all consistently points to this idea that things are getting worse for workers and much better for billionaires.”

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Adam Hardy

Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 500 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on several of Money’s marquee rankings, including Best Hospitals, Best Credit Cards, Best Places to Live and others. In 2025, Adam was named a Goldschmidt Data Journalism Fellow by the Society for Advancing Business Editing and Writing (SABEW). As part of the fellowship, he received hands-on training from SABEW, the U.S. Census, U.S. Federal Reserve Bank, Bureau of Labor Statistics and other federal government agencies in Washington, D.C. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in St. Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.