Goldman says the economy is rewarding capital ownership over labor — and most Americans don’t own enough of it to benefit

Goldman Sachs research reveals that the American economy has been rewarding capital ownership over labor for over three decades. The labor share of income in the nonfarm business sector has dropped by roughly 7.5 percentage points since the 1990s, hitting its lowest point in decades in 2026. However, not all of this decline is due to capital owners gaining at the expense of labor.

Goldman economist Abhay Duggirala estimates that around 40% of the decline is due to measurement errors in how wages and profits are counted, rather than an actual shift in income. The remaining 60%, or about 4.5 percentage points, is a genuine shift in the economy. This decline can be attributed to rising corporate markups, automation, and the erosion of workers' bargaining power over the past few decades.

The report also adds to the debate about whether the American middle class is truly shrinking, suggesting that while the economy has grown, the middle class is struggling to feel the benefits.