US workers’ income share hits historic low as AI-driven profits soar
Workers’ portion of US income fell to its lowest since records began, even as AI-related corporate margins reach record highs.
Treasury Secretary Scott Bessent and Federal Reserve Chairman Kevin Warsh argue that an upcoming AI productivity boom will make the United States richer and even deflationary, allowing the $40 trillion debt to be ignored. Yet recent data show the labor share of national income has dropped to 52.8%, the lowest point recorded since 1947, while corporate profit margins have risen to a record 14.9% of GDP. EY-Parthenon chief economist Gregory Daco says this divergence stems from a decade of automation, cost discipline and capital investment, with AI only intensifying concentration among a few large firms.
Historical tech revolutions initially benefited big, vertically integrated companies, and Daco cautions that AI may follow a similar pattern. Meanwhile, imports of large computers for AI servers have exploded to an annualized $450 billion, offsetting any GDP gain from the equipment. Analysts question whether the surge in investment will translate into broader wage growth or simply enrich owners of data-center assets.
Why it matters
Declining worker income share suggests the AI boom may widen inequality despite overall economic growth.
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