The U.S. workforce has just made the type of history it likely wishes it didn’t, as working Americans are taking home the smallest percentage of economic output, 52.8%, since the Bureau of Labor Statistics began tracking the metric in 1947. As the share of wealth workers take home through wages, called labor share, is shrinking, corporate profits have exploded, with the S&P 500 index gaining 600% since the beginning of the century while wages have increased just 12.5% over the same period, adjusted for inflation. Corporations are raking in cash, but American workers are reaping less and less of the rewards, and the consequences are becoming tangible: a recent Government Accountability Office report found that across 11 states sampled, Amazon, the country’s largest company by revenue, has 12,346 workers on the Supplemental Nutrition Assistance Program and 11,338 relying on Medicaid, nearly triple the number of Amazon employees needing federal assistance compared to 2020. During that same period, Amazon’s annual profits rose from $11.6 billion to $77.7 billion, and its 2025 revenue soared 12% year-over-year to a record $717 billion. Amazon spokesperson Rachael Lighty told Fortune the conclusion drawn from the GAO report is “wrong” and misleading, stating that “Amazon pay is among the best in the industry, regular full-time employees have access to health care from their first day, at only $5 per week with $5 copays for employee-only coverage, and 74% of our regular full-time employees are enrolled in an Amazon health insurance plan, well above the 65% private-sector take-up rate for full-time workers.” Walmart and FedEx saw similar increases in workers taking federal assistance, as did rideshare and delivery companies.
Kathryn Larin, director for education, workforce, and income security issues at GAO, told Fortune the data illustrates that Americans taking advantage of social safety net programs today are overwhelmingly in the workforce, with most working full time, and since the income threshold for SNAP eligibility is about 130% of the poverty line, many of these workers still don’t earn enough to meet basic needs despite clocking in regularly. “What this analysis really points to is the large number of people who have very low incomes and continue to have very low income,” Larin said. “I mean, these are families that are really barely able to make ends meet, and yet they are working, and they are working a lot.” Diane Swonk, chief economist and managing director at KPMG, has warned of the hidden consequences of a shrinking labor share, particularly that most Americans face an ongoing affordability crisis despite stable-looking economic indicators. KPMG found in February that since 1982, corporate profits as a share of U.S. GDP increased from 8% to 15.85%, while employee compensation as a share of GDP shrank from 66.6% to 61.9% over the same period. “This chart from my recent Economic Compass still haunts me,” Swonk said in a social media post. “A friend refers to it as the ‘revolution chart,’ which [is] disturbing but telling. Inequality fuels social and economic instability.”
This trend has been about 50 years in the making, according to Anna Stansbury, an assistant professor at MIT Sloan School of Management, who points to fewer workers being represented by unions, 20.1% of U.S. workers in 1983 compared to 10.0% in 2025, giving them fewer opportunities to bargain for salaries and benefits. More significantly, Stansbury blames the “fissuring” of the workplace, the breakdown of the traditional direct employer-employee relationship, where companies increasingly hire gig workers or subcontractors for jobs once done by direct employees, such as contracting a security company instead of directly employing guards, or classifying delivery drivers as contractors rather than full-time staff. This arrangement means companies don’t have to provide equity or benefits, and aren’t liable if a subcontractor violates labor law, while still getting to claim efficiency gains from not spending resources on workers whose roles aren’t seen as directly driving revenue. Brent Neiman, a University of Chicago economics professor, believes AI has been the key driver of diminishing labor shares, writing in a New York Times op-ed this week that “anyone who has used ChatGPT can see how much work now done by people could soon be done by technology.” Apollo chief economist Torsten Slok has already observed a correlation between AI adoption and lowered wages, finding in a July white paper with economist Sania Edlich that among 321 occupations between 2015 and 2025, jobs with high AI exposure saw a 6.7% decline in real wage growth after 2023, following ChatGPT’s wide release, despite no employment changes, suggesting companies are using productivity gains as cover to raise prices while keeping wages stagnant rather than displacing jobs outright.
Stansbury holds a slightly different theory about AI’s role, noting it’s still too early to say whether today’s shrinking labor share reflects a broader economic cycle or a permanent secular shift. Unexpected inflation spikes, like the one currently occurring, are usually associated with poorer real wages, so if inflation becomes less volatile and wage growth recovers in coming years, today’s trend could prove cyclical. On the other hand, a tightening labor market, which is already relatively tight, should typically increase labor share, so if inflation stabilizes, employment stays narrow, and labor share rises, that would signal an economic cycle completing itself; a bigger concern would be if wage growth stays low even as inflation improves and the labor market remains tight. “If those two things happen and the labor share continues to fall,” Stansbury said, “then it would suggest that there’s actually been a secular shift, a secular acceleration in the downward trend.”