Falling profit margins can absorb lots of wage growth in coming years: Labor share of income, actual and projected based on current wage growth and 2% inflation, 2016–2036
| Labor share of income | Labor share of income | 2019 average | 2007 average | 2000 average | |
|---|---|---|---|---|---|
| 2016-01-01 | 75.09% | 76.3% | 77.8% | 82.4% | |
| 2016-04-01 | 75.57% | 76.3% | 77.8% | 82.4% | |
| 2016-07-01 | 75.66% | 76.3% | 77.8% | 82.4% | |
| 2016-10-01 | 75.81% | 76.3% | 77.8% | 82.4% | |
| 2017-01-01 | 76.16% | 76.3% | 77.8% | 82.4% | |
| 2017-04-01 | 76.07% | 76.3% | 77.8% | 82.4% | |
| 2017-07-01 | 76.34% | 76.3% | 77.8% | 82.4% | |
| 2017-10-01 | 76.45% | 76.3% | 77.8% | 82.4% | |
| 2018-01-01 | 76.14% | 76.3% | 77.8% | 82.4% | |
| 2018-04-01 | 76.01% | 76.3% | 77.8% | 82.4% | |
| 2018-07-01 | 75.52% | 76.3% | 77.8% | 82.4% | |
| 2018-10-01 | 75.40% | 76.3% | 77.8% | 82.4% | |
| 2019-01-01 | 76.64% | 76.3% | 77.8% | 82.4% | |
| 2019-04-01 | 76.38% | 76.3% | 77.8% | 82.4% | |
| 2019-07-01 | 76.21% | 76.3% | 77.8% | 82.4% | |
| 2019-10-01 | 75.99% | 76.3% | 77.8% | 82.4% | |
| 2020-01-01 | 77.55% | 76.3% | 77.8% | 82.4% | |
| 2020-04-01 | 77.38% | 76.3% | 77.8% | 82.4% | |
| 2020-07-01 | 74.44% | 76.3% | 77.8% | 82.4% | |
| 2020-10-01 | 75.80% | 76.3% | 77.8% | 82.4% | |
| 2021-01-01 | 74.28% | 76.3% | 77.8% | 82.4% | |
| 2021-04-01 | 73.20% | 76.3% | 77.8% | 82.4% | |
| 2021-07-01 | 73.62% | 76.3% | 77.8% | 82.4% | |
| 2021-10-01 | 74.16% | 76.3% | 77.8% | 82.4% | |
| 2022-01-01 | 74.67% | 76.3% | 77.8% | 82.4% | |
| 2022-04-01 | 73.98% | 76.3% | 77.8% | 82.4% | |
| 2022-07-01 | 74.21% | 76.3% | 77.8% | 82.4% | |
| 2022-10-01 | 74.20% | 76.3% | 77.8% | 82.4% | |
| 2023-01-01 | 74.34% | 76.3% | 77.8% | 82.4% | |
| 2023-04-01 | 74.49% | 76.3% | 77.8% | 82.4% | |
| 2023-07-01 | 74.63% | 76.3% | 77.8% | 82.4% | |
| 2023-10-01 | 74.77% | 76.3% | 77.8% | 82.4% | |
| 2024-01-01 | 74.92% | 76.3% | 77.8% | 82.4% | |
| 2024-04-01 | 75.06% | 76.3% | 77.8% | 82.4% | |
| 2024-07-01 | 75.21% | 76.3% | 77.8% | 82.4% | |
| 2024-10-01 | 75.35% | 76.3% | 77.8% | 82.4% | |
| 2025-01-01 | 75.50% | 76.3% | 77.8% | 82.4% | |
| 2025-04-01 | 75.64% | 76.3% | 77.8% | 82.4% | |
| 2025-07-01 | 75.79% | 76.3% | 77.8% | 82.4% | |
| 2025-10-01 | 75.93% | 76.3% | 77.8% | 82.4% | |
| 2026-01-01 | 76.08% | 76.3% | 77.8% | 82.4% | |
| 2026-04-01 | 76.23% | 76.3% | 77.8% | 82.4% | |
| 2026-07-01 | 76.37% | 76.3% | 77.8% | 82.4% | |
| 2026-10-01 | 76.52% | 76.3% | 77.8% | 82.4% | |
| 2027-01-01 | 76.67% | 76.3% | 77.8% | 82.4% | |
| 2027-04-01 | 76.82% | 76.3% | 77.8% | 82.4% | |
| 2027-07-01 | 76.96% | 76.3% | 77.8% | 82.4% | |
| 2027-10-01 | 77.11% | 76.3% | 77.8% | 82.4% | |
| 2028-01-01 | 77.26% | 76.3% | 77.8% | 82.4% | |
| 2028-04-01 | 77.41% | 76.3% | 77.8% | 82.4% | |
| 2028-07-01 | 77.56% | 76.3% | 77.8% | 82.4% | |
| 2028-10-01 | 77.71% | 76.3% | 77.8% | 82.4% | |
| 2029-01-01 | 77.86% | 76.3% | 77.8% | 82.4% | |
| 2029-04-01 | 78.01% | 76.3% | 77.8% | 82.4% | |
| 2029-07-01 | 78.16% | 76.3% | 77.8% | 82.4% | |
| 2029-10-01 | 78.31% | 76.3% | 77.8% | 82.4% | |
| 2030-01-01 | 78.46% | 76.3% | 77.8% | 82.4% | |
| 2030-04-01 | 78.61% | 76.3% | 77.8% | 82.4% | |
| 2030-07-01 | 78.76% | 76.3% | 77.8% | 82.4% | |
| 2030-10-01 | 78.91% | 76.3% | 77.8% | 82.4% | |
| 2031-01-01 | 79.07% | 76.3% | 77.8% | 82.4% | |
| 2031-04-01 | 79.22% | 76.3% | 77.8% | 82.4% | |
| 2031-07-01 | 79.37% | 76.3% | 77.8% | 82.4% | |
| 2031-10-01 | 79.52% | 76.3% | 77.8% | 82.4% | |
| 2032-01-01 | 79.68% | 76.3% | 77.8% | 82.4% | |
| 2032-04-01 | 79.83% | 76.3% | 77.8% | 82.4% | |
| 2032-07-01 | 79.98% | 76.3% | 77.8% | 82.4% | |
| 2032-10-01 | 80.14% | 76.3% | 77.8% | 82.4% | |
| 2033-01-01 | 80.29% | 76.3% | 77.8% | 82.4% | |
| 2033-04-01 | 80.45% | 76.3% | 77.8% | 82.4% | |
| 2033-07-01 | 80.60% | 76.3% | 77.8% | 82.4% | |
| 2033-10-01 | 80.76% | 76.3% | 77.8% | 82.4% | |
| 2034-01-01 | 80.91% | 76.3% | 77.8% | 82.4% | |
| 2034-04-01 | 81.07% | 76.3% | 77.8% | 82.4% | |
| 2034-07-01 | 81.23% | 76.3% | 77.8% | 82.4% | |
| 2034-10-01 | 81.38% | 76.3% | 77.8% | 82.4% | |
| 2035-01-01 | 81.54% | 76.3% | 77.8% | 82.4% | |
| 2035-04-01 | 81.70% | 76.3% | 77.8% | 82.4% | |
| 2035-07-01 | 81.85% | 76.3% | 77.8% | 82.4% | |
| 2035-10-01 | 82.01% | 76.3% | 77.8% | 82.4% | |
| 2036-01-01 | 82.17% | 76.3% | 77.8% | 82.4% | |
| 2036-04-01 | 82.33% | 76.3% | 77.8% | 82.4% | |
| 2036-07-01 | 82.49% | 76.3% | 77.8% | 82.4% |
Notes: It takes the current measure of labor’s share of corporate sector income and assumes that wages rise by 4.3% (most recent three-month pace of wage growth), productivity rises by 1.5% (its long-run average) and prices rise by 2%. Vertical lines highlight labor share peaks in 2019, 2007, and 2000 for information on the limits of a rising labor share of income to absorbing wage growth without pushing up inflation.
Source: Author’s analysis based on data from the EPI Nominal Wage Tracker: https://www.epi.org/nominal-wage-tracker/#chart3.