Wages and salaries dropped to roughly 43% of U.S. gross domestic income in the first quarter of 2026, nearly the lowest share since the Great Depression began, according to a Kobeissi Letter chart based on Federal Reserve Bank data. The figure excludes employer-paid benefits such as health insurance and retirement plans, and the Bureau of Labor Statistics separately reported that wages and salaries rose 3.2% over the 12 months through June 2026. The decline in labor’s share has renewed debate over whether President Richard Nixon’s August 15, 1971 decision to end dollar convertibility into gold contributed to a long-run divergence between productivity and pay. From late 1979 through the first quarter of 2026, productivity rose 93.2% while hourly pay increased just 33.7%, according to the Economic Policy Institute. Economists also cite globalization, technology, automation, weaker unions, and rising household debt as factors that may have held wages back.
