Labor’s Share of the Money Pie Is Bigger Than Economists Thought
High-skilled workers earn more when stock compensation is counted. That doesn’t help less-skilled workers, though.
It’s conventional wisdom that labor’s share of the U.S. national income has plummeted. But by carefully accounting for stock-based compensation, three economists have found that the decline is smaller than is commonly assumed. For high-skilled workers, they conclude, there’s barely been any decline at all in the past four decades.
High-skilled workers earn so much of their pay in the form of equity-based compensation—about 40%—that they can be thought of as “human capitalists,” says a National Bureau of Economic Research working paper by Andrea Eisfeldt of the Anderson School of Management at the University of California at Los Angeles, Antonio Falato of the Federal Reserve Board of Governors staff, and Mindy Xiaolan of the University of Texas at Austin.