The portion of US gross domestic income flowing to wages and salaries has dropped to roughly 43%, a level not recorded since 1929. For those keeping score at home, that’s the year the Great Depression started.

The number comes from Bureau of Economic Analysis data tracking how the economic pie gets divided between workers and capital owners.

The numbers tell a stark story

The wages and salaries share of GDI hit approximately 42.8% in 2024, according to BEA figures. To put that in context, this measure consistently exceeded 50% during the 1940s and stayed above 48% through the 1960s.

There’s also a broader measure of labor’s share that includes benefits, employer-provided health insurance, and other supplements. That figure stood at 53.8% in Q3 2025 and 54.1% in Q1 2026. Even by this more generous accounting, it’s the lowest reading since 1947, when the Bureau of Labor Statistics started tracking it.

The gap between the narrow measure (43%) and the broader one (54%) tells its own story. A growing chunk of what employers spend on workers goes to health insurance premiums and other non-wage costs rather than into paychecks people can actually spend.

The decline has been a slow bleed rather than a sudden collapse. The labor share began its descent in earnest during the 2000s, but the post-COVID period accelerated things considerably. Labor’s cut has dropped about 1.6 percentage points from pre-pandemic levels alone.

Why this keeps happening

The New York Federal Reserve published analysis in June 2026 examining what’s driving the trend. Their conclusion: the recent decline reflects structural changes in the economy, not just the normal ups and downs of business cycles. Though cyclical factors consistent with prior recessions play a role, the underlying shift runs deeper.

Globalization moved production to lower-wage countries. Automation replaced workers with machines. The rise of capital-light tech platforms meant enormous profits flowing to relatively few employees and shareholders. Productivity has continued climbing, and consumer prices have risen alongside it. Wages just haven’t kept pace with either.

What this means for markets and crypto

For investors, the most immediate concern is consumer spending. When workers capture a shrinking share of income, their capacity to buy goods and services weakens over time. Consumer spending drives roughly two-thirds of US GDP, so a structural squeeze on wages eventually becomes a drag on corporate revenues.

For crypto markets specifically, the macro backdrop matters more than many participants want to admit. Bitcoin and risk assets broadly tend to suffer when consumer-driven economic weakness triggers risk-off sentiment. A sustained decline in labor income share could eventually pressure the very demand that supports elevated asset prices across equities and digital assets alike.

There’s also a policy dimension worth watching. Income inequality at these levels tends to generate political responses. Tax reform, minimum wage increases, antitrust enforcement, changes to monetary policy. All of these could materially affect asset prices.

When that data point represents the worst reading in 97 years and aligns with a multi-decade structural trend that the New York Fed itself calls more than cyclical, it’s probably worth paying attention to.