Capital’s Share of Income is Way Higher than You Think

Almost half of households’ market income is received for just being wealthy: owning stuff.

by Steve Roth
https://evonomics.com (May 18 2018)

The shares of income going to “capital” and “labor” are vexed issues. How much is received for doing work, and how much is unearned “property income” – interest, dividends, et cetera? For a long time, economists thought these relative shares stayed roughly unchanged over time {1}. But since the 1970s, and especially since 2000, the share going to owners of capital has been increasing, while labor’s share has gone down.

People get income for doing stuff, and they get income for owning stuff. Increasingly the latter. And the ownership share of income goes to a small slice of households that own almost all the stuff {2}. Continue reading