Automation, robots, software etc. they are all capital share.
I highly doubt automation and robots are a meaningful factor here, but IP and outsourcing have the exact same as automation.
The fact is capital expenditure from company or investors has bought machinery, compute, pipelines, transport, and massive investment to make those workers more productive for decades. As such, the returns to capital as a share has increased. Those places able to deploy capital to add productivity win over those that don’t.
And real total remuneration across all quintiles has increased significantly. BLS among others has all historical data to check.
If/when there’s a period where there isn’t more gains to be had by more investment per worker, and workers become more productive via their own skill (education, diet, genetic implants,…), then more returns will flow that direction.
This is all well known, and easily checked.
That's both true and false. Yes they need very few people to operate, but building and maintaining still need a lot of people.
This is correct, and it has an impact on local employment and social dynamics, but not at the country level.
> They need fewer people to build and to maintain than older ones did.
That's absolutely not true. Quite the opposite. You do need less people to build and maintain a modern plant than to operate an factory in the past.
Also, you need to clarify what you mean by “older”, because heavy industries have automated steadily between the 50s and the 80s, and that process was mostly achieved by the 90s.
And I can't think of an industry that was still labor intensive by the 20s and that has been more impacted by automation than offshoring.
if you formed a co-op of sorts, with let's say 20 people, starting with no land ownership and hardly any tools, they could try to make a business. Whatever they end up starting would be a fairly low-productivity business- washing windows, janitorial services, lawn service, etc. The more tools and land a co-op has to work with, the more productive they can be. With a few million dollars up-front they could have built a factory instead.
The increased productivity generated can be attributed to the capital share of income.
https://www.stlouisfed.org/on-the-economy/2024/jun/worker-sc...
Outsourcing and automation both reduce worker leverage, which reduces wages, which could explain reduced labor share. I'm not sure how one would weight it all.
There's a return on capital than is not spent on employees. That reflects how much capital is growing and how much can be spent on employees in the future.
Just as are the top executives. And the shareholders that have put money into companies that provide "robots, etc.". All these people, including labor, are stakeholders. If there was 5% GDP growth that got reflected as 5% growth in net earnings for the company, one would expect that all the stakeholders would see roughly a 5% increase in their personal earnings from the company. The dollar amount would be higher for higher earners (5% of $1M is greater than 5% of $50k), but the percentage increase would be roughly in line. The real world results are not even close to this "rising tide lifts all boats" ideal.
In any case, it doesn't follow that wages grow with earnings. Wages have historically been a lagging indicator.
Fair point, though it's not completely clear from the comment.
>Wages have historically been a lagging indicator.
Of course, companies don't know in advance that they're going to have GDP-assisted growth. My point was that growth on the back of GDP growth is a collective windfall, and you'd expect it to be evenly distributed. But it clearly isn't.
All human collective endeavors (with few exceptions) require 3 kinds of human-related input: capital, labor and ideas.
Nobody puts their capital into an endeavor in which the plan is for the that capital to provide renumeration for the labor for more than the shortest possible time (*). The goal is always to generate revenue in sufficient volume to pay for the labor, and when that goal is met, that success is a function of all 3 kinds of contribution.
So no, employee compensation does not come from capital, but from revenue that results from the successful interaction of capital, labor and ideas.
(*) non-profits would be an obvious exception, except that nobody actually talks about investing capital in such organizations, we just make "donations" or "grants". That money plays the same role as capital, however.
Nah, it is just capitalism at work. Winner takes all.
[1] https://www.epi.org/publication/strong-wage-growth-for-low-w...
Saying that billionaires "disproportionately" have more assets than non-billionaires is a tautology that says nothing. You might as well say that tall people have disproportionately more height than people who are not tall. Billionaire is a statement about wealth, not income.
> In fact wage growth for the top decile has been recently slower than bottom deciles
Which is a very good thing, but also doesn't address anything. The bottom deciles live from their wages. The top decile either put most of their wages into assets, are already so wealthy that their wages don't matter, or live in luxury they can't afford.
The macroeconomic purpose of inflation as a tool is to lower the wages of high wage earners - because socially you can't really lower people's wages, at best you can refuse refuse them raises. It's easy to raise the income of lower deciles to offset inflation, either through legislation or safety net. Middle-high wage earners who do nothing under inflation face an effective pay cut.
> The guy who's at the 9.99th percentile is a normal salaried worker not doing better.
He is not normal, he is in the top 10%. His income triples or quadruples a median income. He is of course not doing better than himself, but he is doing better than 90% of other people by definition.
Being able to afford a slightly nicer car or house does not change your class. Being able to influence elections, buy lobbying power, play power games, being in the "in" group of capitalism changes your class.
Oligarchs have always been in their own class.
[1] - https://finance.yahoo.com/news/income-puts-top-10-earners-16...
It means having sufficient liquid capital that you can invest it in uncertain outcomes, generally without fear of poverty or perhaps any real negative effects on one's life at all.
Owning a very expensive home in a very high cost-of-living place (or even in a not-so-high cost-of-living place) does not place a person in that position.
the most accepted way to divide in socialist circles is based off where your income comes from, your relation to capital. if you have to work for someone else thats working class (proletariat), if you can be independent you are professional or middle class, if you own the means of production for others that makes you a capitalist. owning a house is only capital class if you rent it out.
from that pov almost all tech workers are professional or working class. with founder ceos its more complicated because they own capital but also work for themselves through their company so you can take them as either. i guess it depends on if you like that person.
It's also utterly deranged even when you just consider that most tech workers get compensated with stock.
You can get money from both labor and capital. This is called "middle class." Don't let it melt your brain, but don't oversimplify to "you owned a stock so are capital class" either. Just give the labor/capital percentages (ordinary income / capital gains) and note how it leans.
New grad tech worker: 100%/0%
Mid career tech worker: 50%/50%
Late career tech worker: 10%/90%
Retired: 0%/100%
Introducing the fact that it's a spectrum and that equity ownership (which a vast majority of people in this industry have) makes you a capital owner is exactly my correction to that.
And yea, once you start getting actual capital and start reaping the benefits of that wealth you start being identified as a capitalist in the socialist world view.
Edit: the comment I replied to originally had this sentence at the end
> Very typical for a certain type of folk. It's also utterly deranged even when you just consider that most tech workers get compensated with stock.
And how many american middle class+ (generalizing beyond tech workers) don't own equity?
Our 401K match maxes out at $50 per paycheck.
I am in a lower tier of the market than Silicon Valley and after 15 years of making over six figure salary I have not been given a single stock, and none of my employees or members of my social circles that don’t work at FAANGs have either.
Note that around half of the US stock market is passively owned, so this is not a small number on aggregate
Further see: my reply to a sibling in this same thread.
Considering how you ignored the response to you asking
> Eh? Which tech company doesn't give RSUs to fresh grads? Startups of course give options.
I assume you are not here in good faith and just want to argue that all is well and good.
Don’t try and hide behind your second argument when your first point was contested and then act all indignant.
Edit:
Responding to
> Further see: my reply to a sibling in this same thread.
I found your other reply here[1], quoting in case you edit it
> Exactly. The original comment in this thread asked if most tech workers here are part of the capital class themselves. Which was answered by saying that if you're employed by someone else, you are part of the worker class and thus tech workers are part of the worker class. > Introducing the fact that it's a spectrum and that equity ownership (which a vast majority of people in this industry have) makes you a capital owner is exactly my correction to that.
You are still assuming that most tech workers are given stock grants and have equity. I fundamentally disagreed with that.
I do not believe that the vast majority of people in this industry have been given equity.
Don’t try and pretend that I am wrong because I disagree with you. Show your work or be dismissed.
For me personally, I am in the top 10%; but a few decades ago, I was not.
People debate how much social mobility there is in the US, but it seems pretty clear that the trend has been toward less mobility. The founding fathers of the US did not want to replace one aristocracy with another. Obviously there are some who think the change makes sense-- not me.
And when you dig a bit more, you kinda find out this isn't really true?
I mean look at this AI summary of asking "Was Jeff Bezos born into wealth"
> Jeff Bezos was not born into wealth; his mother was a 17-year-old student and his adoptive father was an impoverished Cuban refugee who arrived in the U.S. alone at age 16. However, his maternal grandfather owned a large Texas ranch and later provided roughly $250,000 to help fund the launch of Amazon
Oh so his parents weren't wealthy only his grandparents. That's totally different
You know what my Grandpa gave me? A used car worth about 3 grand. Still amazing, I'm still very grateful to him! But the comparison here is absolutely not in the same league!
And I'm still a fortunate one, because many people get much less than a car from their families
Everyone's life is a mix of skill and luck, so to discredit skill, you would need to quantify the luck. An easy example is a lottery winner, a hard example is a Bezos. Any investor with the foresight to see what Bezos could do with grans money, would jump past her in line and give him triple.
I don't think that really matters? The fact that they even had that shot at all is such an incredible opportunity above people whose family simply cannot afford to even try
There are far far more stories of investors giving nascent broke startups money than families.
US Household Wealth Distribution (Q1 2026, Fed DFA)
Group | Share of US Total Net Worth
------------|-------------------------
Top 0.1% | 14.4%
Top 1% | 31.6%
Top 10% | 67.9%
|
Bottom 90% | 32.1%
Bottom 50% | 2.5%
The top 1% alone holds more than the entire bottom 90% minus the upper-middle segment.
To be in the top 10% you would need roughly 1,8 Million $ in assets (that's probably 90% of HN useerbase)
Basically, the bottom 50% are a slave class that doesn't even participate in the economy.
LE: The richest 20% are the only ones powering the U.S. economy, per Moody's Zandi. K-shaped economy all the way.
While there are many people who are currently in the bottom 50% and will probably stay there; no one is a slave who has to stay there.
My original post (which is somehow unpopular on HN) points this out. I spent my first 30 years in that group and worked my way out of it.
That's like saying not everyone who finds themselves homeless must stay homeless, as if they can just choose to go buy a house.
>I spent my first 30 years in that group and worked my way out of it.
And what did the job market look like over the those 30 years versus today? You probably weren't competing with infinity AI bots at every resume application.
Not here to steal your thunder and deny your individual success story, but the tired "I pulled myself by my bootstraps" doesn't mean anything to the people who are strugling.