Workers' share of US national income fell to a record low of 52.8% in the second quarter of 2026, the Federal Reserve's Barr said in a speech published Nov. 12.
The share stayed between 60% and 65% after World War II before beginning to fall in 2001, Barr said. The Federal Reserve Board published the speech under the title “Barr, American Inequality and the Future of AI.”
The decline became faster after the pandemic and particularly steep over the past year, Barr said. Changes in how income is assigned to labor and capital explain part of the fall, but a downward trend persists after adjustments, he said.
Barr linked that trend to questions about how artificial intelligence could change the distribution of income and wealth. He drew on the central bank's 2025 Survey of Consumer Finances, published in October, and research tracing wealth inequality back to the 1940s.
The wealthiest tenth of households held nearly three-quarters of US wealth, while the bottom half held about 2%, the central bank's survey found. The richest 1% held about a third, worth nearly $60 trillion, Barr said.
The concentration extended further at the top, with the wealthiest 0.1% holding one-sixth of national wealth, Barr said. A household at the threshold of the top 1% held $16.3 million, compared with $215,000 for the median household, the survey found.
The share held by the 400 richest individuals rose to roughly 4% from 3% in 2022, Barr said. He described that calculation as a rough estimate combining Forbes magazine's tally with the central bank's survey.
Business ownership helped explain the widening gap, Barr said, citing research showing that returns on business equity contributed to wealth inequality over decades. Wealthy households received much of their income from investments and business profits, while middle-class households depended mainly on paychecks, he said.
Households between the middle and the top tenth of the wealth distribution held only 17% of publicly traded stocks by value, the survey found. Housing was a common asset for this group, but its value grew more slowly than business equity, Barr said.
Financial strain also reached beyond wealth rankings, Barr said. The central bank's separate Survey of Household Economics and Decisionmaking found that 31% of respondents in 2025 lacked cash to cover an emergency expense of $500 or more.
Research points to three explanations for labor's declining income share, Barr said: technology reducing demand for workers, industries dominated by fewer companies and weaker worker bargaining power. Each bears on how artificial intelligence could affect inequality, he said.
Technology can replace workers while also improving existing jobs and creating new ones, Barr said. He said historical changes in inequality showed that policy choices, education, economic growth and technological change help determine how income and wealth are distributed.
