American workers are getting a shrinking slice of the pie, even as corporate profits hit record highs.
According to economist and former U.S. Labor Secretary Robert Reich, workers just took home their smallest share of the nation’s income since 1947.
In a post on X, Reich wrote, “American workers just took home their smallest share of the nation’s wealth since 1947 — even as corporate profits soar.”
Alongside the post, he shared a chart and video explaining the long-term trend: a steep drop in worker compensation relative to gross domestic product (GDP), and a steep rise in corporate profits.
The numbers speak for themselves. Over the past several decades, the share of national income going to everyday workers has fallen, while the portion going to the wealthiest Americans and corporations has grown.
“What’s the most powerful tool we have to fight widening inequality?” Reich asks in the video.
“Take a look at this chart.” He then highlights two key trends: the rising share of income going to the richest 10% and the declining share of workers who belong to a union.
The Union Connection
Reich points to the mid-20th century as a turning point when strong unions helped working Americans gain more economic power.
“There was a dramatic rise in union membership during the 1940s and ’50s,” he says.
“As that happened, more and more of the nation’s income went into the pockets of ordinary working people instead of into the pockets of the richest 10%.”
Unions, he explains, give workers the ability to bargain for a larger share of the profits they help generate.
“And the benefits of unions help non-union workers, too. In order to attract workers, non-union employers have to increase their pay,” Reich adds.
During this period, the U.S. economy was booming, and the middle class was growing stronger.
“By the mid-1950s, America’s economy was firing on all cylinders, powered by the biggest middle class this nation had ever seen,” Reich says.
The Decline of Worker Power
But starting in the 1970s, things began to shift. Union membership fell, and income inequality started rising again.
According to Reich, the change wasn’t accidental.
“At that time, corporations doubled down on busting unions, while their allies in government weakened labor laws,” he says.
The decline accelerated in the 1980s under President Ronald Reagan, who famously fired striking air traffic controllers in 1981.
The result? A widening gap between the top earners and everyone else.
“Since then, the gap between the rich and everyone else has skyrocketed to levels not seen since around the Great Depression,” Reich explains.
A Call to Action
Reich believes this shift is reversible, but it requires rebuilding worker power.
“This isn’t rocket science,” he says. “If we want to make sure our economy works for everyone, not just the super-rich, we need to build back union power.”
He argues that reviving labor unions could play a major role in reducing inequality, strengthening the middle class, and making the economy more fair.
“A resurgence of labor unions would go a long way to fighting inequality, bringing back a large and vibrant middle class, and making life better for all Americans,” Reich says.
“Which is why it’s vital that we support unions. The future of our country depends on it.”
Corporate profits keep climbing, but workers aren’t seeing the rewards.
The gap between how much the economy grows and what regular people take home in pay is becoming more obvious.
To Reich and others, it’s time to ask tough questions about who actually gains from America’s economic success, and how to make sure working people get a fairer share.