The Rise of Superstar Firms and the Fall of the Labor Share

The “labor share” of GDP has fallen since 2000. Is this another sign that the robots are going to rule our economy? David Autor, an economics professor at MIT, explains the differing explanations for why this is happening.

The “labor share” of GDP means the share going to wages, salaries and benefits—as opposed to going to capital (stockholders, business owners, etc.). That money hasn’t gone away, but it has been concentrated in the hands of fewer and fewer people.

Why is this happening? Is it because of robots taking work from humans? A lack of competition? Or something else? David Autor explains the answers he discovered in his 2019 study on labor share and superstar firms.