Labor and Capital’s Shares of Gross Domestic Income

How much of U.S. income goes to employees, and how much takes the form of corporate profits? These charts put both measures in relation to gross domestic income (GDI), the income earned and costs incurred in producing the economy’s output.

Both charts show the same period. Their vertical axes use different ranges to make changes in each share visible; compare the percentage readings, rather than the height or slope of the lines. Dates identify the start of each quarter: April 2026, for example, represents Q2 2026.

What the two shares measure

Labor’s share is employee compensation divided by GDI, multiplied by 100. Compensation includes wages, salaries, and employer contributions for benefits and social insurance. It does not estimate the labor portion of self-employed workers’ income.

Capital’s share here is corporate profits divided by GDI, multiplied by 100. The profit measure includes BEA’s inventory valuation and capital consumption adjustments and is measured before corporate income tax. It is a measure of corporate profits, rather than every form of income from capital, such as rent and interest.

These shares do not add up to 100%. They are two selected income measures, not a complete division of GDI between labor and capital. GDI also includes items such as proprietors’ income, rental income, net interest, taxes on production, and depreciation. An increase in one plotted share does not imply an equal decrease in the other.

Sources and calculation

Both charts use U.S. Bureau of Economic Analysis data distributed through FRED: employee compensation (COE), corporate profits with inventory valuation and capital consumption adjustments (CPROFIT), and gross domestic income (GDI).

The inputs are quarterly figures in billions of current dollars at seasonally adjusted annual rates. Dividing each numerator by GDI cancels those units. The calculations match reported quarters without filling gaps, and the data can be revised by BEA. The underlying series retain history from 1947; this page displays the common period from 1960 onward.

GDI and GDP measure the economy from different sides. Their published values differ because they use different source data, so replacing GDI with GDP would change these ratios. The separate corporate-profit chart in the Buffett indicator discussion also uses a different numerator: after-tax profits without these adjustments.