Yet another Hacker News

U.S. workers took home their smallest share of capital since at least 1947

157 points qlte 1 hour ago 51 comments

edoceo 1 hour ago | parent

A disaster. Economy is a flow of capital, it cycles up. USA needs the general public to have money for necessities as well as a little more for saving and then extras.

Top earnings come from the support of 1000s of participants with lesser earnings. This is an unhealthy economic trend. It's more than a stagnation risk.

Issues like these are created in a short term but take comparatively longer to correct.

sixdimensional 53 minutes ago | parent

Lower wages, job losses or eliminations, structural unemployment and forced entrepreneurship were all concepts that emerged during the Great Depression [1].

The world is a very different place than it was in the early 20th century, but at the same time, "those who do not learn from history are doomed to repeat it".

I say this not to be a "doomer". I say this because those forces I mentioned above were very real and we have to keep our eyes wide open.

[1] https://en.wikipedia.org/wiki/Great_Depression

ProllyInfamous 46 minutes ago | parent

>A disaster.

Pay peanuts, expect a circus.

At this point, we'll either have universal UBI -=or=- ongoing war.

Unfortunately, the latter is more profitable, so... the future is by design, probably.

kevin_thibedeau 37 minutes ago | parent

UBI will cause instant inflation and everyone will be in the same place they started from.

minraws 32 minutes ago | parent

Not if we control the prices, the idea of UBI isn't to give money but to give resources, if everyone gets a house, clothes, food and education for free that's UBI as well. Even if it didn't involve a direct benefit transfer.

And that's the only solution to UBI, when resources are abundant enough that UBI isn't needed or with UBI we increase resource enough that there isn't inflation risks.

All UBI experiments till now have proven it's not bad for the people, if we just manage the economy part it will all work out somehow.

bennettnate5 10 minutes ago | parent

Controlled wages and fixed prices--that's sounding suspiciously like a command economy there. Well played, comrade.

(And I say controlled wages because the natural solution people bring up to paying for UBI is to carpet-tax the assets of the wealthy).

motbus3 38 minutes ago | parent

You will own nothing and you better like it

bennettnate5 9 minutes ago | parent

"We pretend to work, and they pretend to pay us"

0c3ca83 59 minutes ago | parent

Sounds like the policies that were put in place are doing what they were designed to do, and directing money to where they were intended to.

The work on technology to take the place of policy is proceeding, thought slower than the leadership would prefer.

lotsofpulp 57 minutes ago | parent

Regardless of policy, wouldn't automation inherently lead to agglomeration of capital?

greycol 51 minutes ago | parent

You can implement policies that tax more than just income. So no not regardless of policy but yes where policies don't exist to reshape a system where capital (i.e. investment in automated production) inherently takes more of the wealth than labour it will inherently lead to an agglomeration of capital.

qlte 38 minutes ago | parent

But instead, ever since the brief federal surplus at the end of the 90s, we've done multiple multi-trillion dollar tax cuts for the highest earners. Bush tax cuts + 2x Trump tax cuts (most recently in the BBB). In each case after fudging the projections beforehand to claim it will reduce the deficit somehow, then the deficit grows by a massive amount.

We've been reshaping the system to redistribute trillions to capital owners via government IOUs that will eventually come due. Inevitably, this will be "solved" by cutting benefits to workers while insisting no other solution could possibly exist.

Like, you know, undoing these relatively recent handouts to the ultra rich and restructuring policy to the benefit of workers.

0c3ca83 28 minutes ago | parent

Today, if sanitation workers go on strike, they rapidly end up with a negotiated settlement. If we had self driving garbage trucks that didn't need them, what political leverage would they have? The same too goes for other industries.

If police have advanced surveillance technology and drones, even violent protest becomes very hard.

What pressure is there to cater to people who are powerless dead weight on the economy?

odyssey7 11 minutes ago | parent

My conspiracy theory is that Elon was right those years ago when he claimed genuinely autonomous vehicles would soon be achieved, but that the result has been suppressed. If you let people stop working and pay a basic income, it will be hard to put that cat back in the bag when you need labor again, so the policy position would be to have truck drivers keep working for the sake of continuing to work.

RitchieRicher 55 minutes ago | parent

as someone said, if your workers are overweight, you are doing Capitalism wrong

Dig1t 50 minutes ago | parent

We do still have a real obesity problem in the USA and it affects the poorest in the country quite badly.

https://pmc.ncbi.nlm.nih.gov/articles/PMC3198075/

In fact according to government data:

>U.S. counties with poverty rates exceeding 35% have age-adjusted obesity rates substantially higher than wealthy counties.

Being fat is actually a disease of the poor.

reilly3000 29 minutes ago | parent

Counterpoint: Mark Benioff is worth about $9 B and has struggled with obesity for most of his career.

kingkawn 54 minutes ago | parent

It’s ok, soon the greedy will take home their smallest share of heads

_heimdall 52 minutes ago | parent

This shouldn't be a surprise. The US came out of WWII with similarly high debt to GDP. They only corrected that through financial repression, and that's likely to be their only chance of lowering that debt ratio today.

If we don't spend the next few decades skating by while the currency is debased under our noses, I assume its because there's a much more severe and tragic response.

fasterik 49 minutes ago | parent

That, and there is a looming Social Security crisis due in 2032. Fiscal responsibility hasn't been either party's (or voters') priority for the past two decades, and it's probably going to take another disaster to put it back on the table.

qlte 26 minutes ago | parent

The problem would be much less intractable if one party didn't do 3 pointless multi-trillion dollar tax cuts primarily for the benefit of ultra high earners. Each time promising it would reduce the deficit, with increasing absurdity.

It's depressing to look at the before/after federal deficit estimates over the last two decades without the Bush tax cuts, even before taking out the Trump 1 tax cuts (and future projections from the recent Trump 2 cuts in the BBB). Just a huge unforced error that was completely foreseeable each time.

Contrary to public perception and PR, the "party of fiscal responsibility" has consistently been a disaster for controlling the deficit.

melbournesky 21 minutes ago | parent

Wahh republicans isn't a reasonable answer. It was Clinton and his ilk that got the US into this.

fasterik 15 minutes ago | parent

Clinton left office with a budget surplus. He deserves some credit for that, though it was also partly due to the end of the Cold War and the Republican majority Congress under Gingrich. Deficit spending increased dramatically under George W. Bush after 9/11 and every subsequent administration has continued this.

lotsofpulp 9 minutes ago | parent

Clinton isn't a reasonable answer, he left office 25 years ago.

Teever 8 minutes ago | parent

It's easy to place the blame on political parties or the wealthy but at the end of the day the problems that America faces are the result of a series of choices made by the electorate over decades despite the feedback from each of these decisions as they were made.

At then end of the day the way things are in America is a reflection of what the American people want their country to be.

People like to make the argument that Americans would stand up and sort this problem out, but the country is just so big, and the average American just doesn't have enough money to do something, and people are spread far and wide and that there's just no way for the to come together to decisively end these problems but it's just excuses. People by and large are content with the status quo. This is just what they want.

Precarious state of health care access and incomprehensibly opaque costs? That's a choice.

An ever escalating police state that has reached new peaks of immigration police and pulling random people off the street and a national guard perpetually patrolling cities? That's a choice.

Forever wars with no discernible objective or end point in the Middle East? That's a choice.

consolidation of media and economic control into a smaller and smaller group of people? That's a choice.

All of this is a choice that Americans collectively continue to make. And my prediction is that they'll continue to keep making these (imho) poor choices.

_heimdall 4 minutes ago | parent

This isn't a "one party is the problem" situation. Both parties have spent over 20 years fighting pointless wars. Both parties spend without balancing a budget. Both now gerrymander and both at least threaten to stack the court. Both pander to voters with short term solutions that actively do harm long term. Both were responsible for the shit show of the pandemic response.

The list goes on and on. They argue over where new debt should be spent, who to bomb, or what new powers the government should claim. What we don't see is a debate over government overreach, balanced budgets, or even whether we should even be in a war with Iran.

throwaway5752 25 minutes ago | parent

It's the Baby Boomers. They will transition to collecting ssi.

This was the "Locked Box" that Al Gore got mocked for on SNL 26 years ago. So people saw it coming and were trying to fix it then. And it was the Democrats trying to fix, it is not a "both sides" case. There is one party trying to destroy Social Security, and one party trying to fix it. I encourage anyone to not take my word for it, and conduct some basic research of their own.

Anyway, the crisis is that there is less income than distribution. So we collect debt (unlikely, given appetite for US debt after the last 20 months or so) or reduce payments.

Since many social security recipients are wealthy and not at risk of poverty, what will happen is likely some sort of reduction after means testing. It is not ideal, but entirely because fiscal choices of America's collective fault.

cool_dude85 39 minutes ago | parent

What does debt to gdp have to do with the labor share of income?

motbus3 36 minutes ago | parent

Don't quote me on that, but people are saying that despite American companies are getting more money, people are getting even less. Or that's my understanding. Happy to be corrected though

fasterik 32 minutes ago | parent

Public debt burden increases interest rates, which benefits holders of government bonds, who are disproportionately wealthy households and financial institutions. It also crowds out private investment and inhibits economic growth, which weakens workers' bargaining power.

_heimdall 25 minutes ago | parent

It doesn't directly. Financial repression does though, its a "solution" to high federal debt and leaves the average person having to eat the cost.

Its a bit like austerity, but instead of taking a share of everyone's wealth they just make all of our stored wealth worse less. They do that by inflating asset prices much faster than wages can keep up, meaning those large corporations at the top get rich while the average person falls further and further behind.

odyssey7 2 minutes ago | parent

It seems like the economy is kind of doing this on its own? The Fed has been keeping rates higher, despite political pressure, without yet having achieved the inflation target.

Tryk 38 minutes ago | parent

In a completely unrelated note, corporate profits are at a historical high. Up 22.8% from the same period last year.

https://www.statista.com/statistics/222127/quarterly-corpora...

ano-ther 19 minutes ago | parent

The US had a fiscal surplus under Clinton and would have one today if it weren’t for the Bush and Trump tax cuts.

Figure 1: https://www.americanprogress.org/article/why-the-national-de...

_heimdall 1 minute ago | parent

To be fair, Clinton pulled off a surplus through clever accounting though it would have been comparatively close either way.

I'm not sure how you could possibly narrow the issue down to two presidents' tax cuts alone. What about all the war spending? Or money printing? Or a partially implemented half step towards socialized health care?

Both parties are responsible for the debt we hold today, they have just argued about what to spend it on along the way.

skew-aberration 49 minutes ago | parent

Capital != money. Confirmed that author does not have finance, economics or business background.

JackFr 17 minutes ago | parent

Yeah, my thought exactly. Capital is the firm. Labor is the workforce. Wages are the return to labor and profit is the return to capital. Labor and capital are in eternal struggle for their piece of the pie.

skew-aberration 12 minutes ago | parent

Capital historically meant 'that part of production set aside for future production'. Machines, land improvements, infrastructure, intellectual property. Now it tends to include all assets used to generate wealth - including things like land which were once in their own category.

Wages are just money and may or may not become capital according to the discretion and opportunities of the employee.

daveguy 6 minutes ago | parent

The balance is clearly out of whack in favor of capital.

robotburrito 44 minutes ago | parent

Surely there is a ycombinator startup around the corner that will fix this problem.

jackmott42 37 minutes ago | parent

Sadly the people behind ycombinator think helping this administration crush woke youth, and spying on us with flock cameras, is more important that preventing fascism or corporotocracy.

olelele 35 minutes ago | parent

Marxism-as-a-service?

toddmorey 44 minutes ago | parent

So here's what I don't get: The United States is the world's largest consumer market. From what I can find, personal consumption expenditures (PCE) account for about two-thirds to 70% of total US economic output. We live and die on consumer spending and confidence.

So next we automate the bejeebus out of this economy with AI robots and Elon believes it grows 3x in under five years. Splendid. But if a consumer-driven economy has no payrolls, it eventually has no buyers. It just seems to me that ultimately, billionaires and investors cannot decouple themselves from the masses... but maybe it's a game of get mine before the system collapses?

RitchieRicher 41 minutes ago | parent

as Elon says, soon money will be worthless. what will matter is how much compute and how many robots you have

so yeah, billionaires without compute or robots will join the permanent underclass

randerson 31 minutes ago | parent

Well, Elon thinks we'll all get a Universal High Income. Holding aside the irony of him thinking the future is socialism, that money has to come from somewhere. If all companies in the future depend on a handful of AI and Robotics companies, I guess that the money has to come from Elon. Seeing as the layoffs have started, what is he waiting for?

xlayn 20 minutes ago | parent

THIS, so much this... but let's use an analogy

if a really powerful mafia got installed into your city, a very small violent group of people demanding people to pay to stay safe... how long before you start organizing? how long before they notice and do something about it?

Alpha3031 18 minutes ago | parent

If billionaires have all the money then there's nothing stopping them from buying all the stuff the economy can produce and leaving the rest of the population to barely get by or starve. Certainly, higher income people might currently spend less than their share of total income (at least between 2017 and 2021, see BLS paper, Garner et al., 2024, Gini of 0.3ish vs what I believe is 0.4ish for post-tax income) because poor people need to spend more of their income on things like food or rent, but there's no reason why the share of spendin by the top x% can't increase. In fact, as I understand it, it already has, according to [2] who themselves cite Moody, the top 20% accounted for 59% of spending in Q3 2025, which was a marked increase from the 40% in the BLS paper.

Now, the top 20% certainly aren't billionaires, but we also have to remember that the Luddites also benefited significantly from the automation of spinning before they themselves were replaced by automated weaving and subsequently suppressed by the state. There is no reason to think our current crop of labour aristocracy immune from the whims of capital when the time comes.

[BLS 2024]: https://www.bls.gov/cex/a-distributional-approach-to-us-pers... [2]: https://www.empower.com/the-currency/money/life/k-shaped-eco...

80fj0348i 8 minutes ago | parent

Today, around 50% of US consumer spending is by the top 10% of wealthiest households. (per Moody's)

The end state of this looks like how humanity looked before the industrial revolution: A single-digit percent of the population has the vast majority of the wealth and virtually all real estate and luxury goods. Between 90% and 95% of the population has just enough to live on, and never enough to build generational wealth or have any class mobility.

Artoooooor 29 minutes ago | parent