[vannevar]

This is consistent with the observation that the top 10% have captured a disproportionate share of GDP growth over the past few decades.

https://equitablegrowth.org/new-data-reveal-how-u-s-economic...

"The past three economic expansions have largely benefitted the top 10 percent. In each, the top decile received between 47 percent and 59 percent of all income growth in the expansion."

[u1hcw9nx]

Also note: Labor share has declined similarly across OECD countries for several decades.

Automation, robots, software etc. they are all capital share.

[stymaar]

> Automation, robots, software etc. they are all capital share.

I highly doubt automation and robots are a meaningful factor here, but IP and outsourcing have the exact same as automation.

[boelboel]

New factories use very few people, part of the reason why it's difficult for many countries to industrialize like South Korea or China did (climbing manufacturing ladder).

[stymaar]

> New factories use very few people

That's both true and false. Yes they need very few people to operate, but building and maintaining still need a lot of people.

[jjk166]

They need fewer people to build and to maintain than older ones did. Further the jobs from building the factory are temporary.

[stymaar]

> Further the jobs from building the factory are temporary.

This is correct, and it has an impact on local employment and social dynamics, but not at the country level.

> They need fewer people to build and to maintain than older ones did.

That's absolutely not true. Quite the opposite. You do need less people to build and maintain a modern plant than to operate an factory in the past.

Also, you need to clarify what you mean by “older”, because heavy industries have automated steadily between the 50s and the 80s, and that process was mostly achieved by the 90s.

And I can't think of an industry that was still labor intensive by the 20s and that has been more impacted by automation than offshoring.

[SideQuark]

There’s plenty of papers showing exactly this. What do you think has driven productivity? People simply bring smarter?

The fact is capital expenditure from company or investors has bought machinery, compute, pipelines, transport, and massive investment to make those workers more productive for decades. As such, the returns to capital as a share has increased. Those places able to deploy capital to add productivity win over those that don’t.

And real total remuneration across all quintiles has increased significantly. BLS among others has all historical data to check.

If/when there’s a period where there isn’t more gains to be had by more investment per worker, and workers become more productive via their own skill (education, diet, genetic implants,…), then more returns will flow that direction.

This is all well known, and easily checked.

[stymaar]

> What do you think has driven productivity?

“Productivity” is a terrible metric for such a discussion, it's not what it sounds, it's merely “real” GDP/worked hours.

> The fact is capital expenditure from company or investors has bought machinery, compute, pipelines, transport, and massive investment to make those workers more productive for decades. As such, the returns to capital as a share has increased. Those places able to deploy capital to add productivity win over those that don’t.

This is the fairy tale you learn in econ 101, but in reality that's not what happened in the period, the businesses that won during the 2000-24 period (the so-called “tech” companies) were companies for which capex were well below average.

> This is all well known, and easily checked.

That's not “well known”, you're just saying the gospel. It doesn't matter if it's contradicted by evidences, you believe that how the world work so it must be true.

[SideQuark]

It's interesting you cut out the "There’s plenty of papers showing exactly this." then pretended the rest is simply ignorant belief.

> the businesses that won during the 2000-24 period (the so-called “tech” companies) were companies for which capex were well below average.

First, it's odd that when discussing the point about total US worker productivity and capital expenditures, you somehow think a sector consisting of less than 1% of workers is evidence. And even on that claim you are incorrect.

Here's the datasets for that period capex by industry [1]. You are demonstrably wrong by a large margin. I expect you to have some better sourced or more convincing data, otherwise it seems you're operating on belief, not evidence.

If you want to try again, try looking at all workers, not cherry picked examples.

> That's not “well known”, you're just saying the gospel

Here's google scholar on the literature around this [2]. Go ahead and tell me again how this is not well known? Pretty much every paper and piece of empirical evidence on this points to the same reasons.

[1] https://pages.stern.nyu.edu/~adamodar/New_Home_Page/dataarch...

[2] https://scholar.google.com/scholar?hl=en&as_sdt=0,15&q=us+pr...

[mech998877]

Robots (and other tools) are capital. A way I think of it:

if you formed a co-op of sorts, with let's say 20 people, starting with no land ownership and hardly any tools, they could try to make a business. Whatever they end up starting would be a fairly low-productivity business- washing windows, janitorial services, lawn service, etc. The more tools and land a co-op has to work with, the more productive they can be. With a few million dollars up-front they could have built a factory instead.

The increased productivity generated can be attributed to the capital share of income.

[stymaar]

That's econ 101. But that doesn't mean that's what happened in the real world.

The thing is you won't be able to name a single industry for which automation has had a significant impact on labor productivity during the 2000-2020.

The US lost almost half of its manufacturing jobs in the 2000s and it has pretty much nothing to do with productivity, and everything to do with businesses moving their production abroad.

Robots can have a huge impact in the coming decades, but you can't argue that they had negligible impact on the past two decades.

[9x39]

Automation isn't foreign to the topic. There's some discussion here that refrains from estimating too hard, but I think it's closer to outsourcing's effect:

https://www.stlouisfed.org/on-the-economy/2024/jun/worker-sc...

Outsourcing and automation both reduce worker leverage, which reduces wages, which could explain reduced labor share. I'm not sure how one would weight it all.

[stretchwithme]

Employee compensation comes from capital. And employees are working at companies that provide robots, etc.

There's a return on capital than is not spent on employees. That reflects how much capital is growing and how much can be spent on employees in the future.

[vannevar]

>And employees are working at companies that provide robots, etc.

Just as are the top executives. And the shareholders that have put money into companies that provide "robots, etc.". All these people, including labor, are stakeholders. If there was 5% GDP growth that got reflected as 5% growth in net earnings for the company, one would expect that all the stakeholders would see roughly a 5% increase in their personal earnings from the company. The dollar amount would be higher for higher earners (5% of $1M is greater than 5% of $50k), but the percentage increase would be roughly in line. The real world results are not even close to this "rising tide lifts all boats" ideal.

[9x39]

They didn't make the rising tide analogy, I read it as how much could be captured by labor if we increased leverage.

In any case, it doesn't follow that wages grow with earnings. Wages have historically been a lagging indicator.

[vannevar]

>They didn't make the rising tide analogy, I read it as how much could be captured by labor if we increased leverage.

Fair point, though it's not completely clear from the comment.

>Wages have historically been a lagging indicator.

Of course, companies don't know in advance that they're going to have GDP-assisted growth. My point was that growth on the back of GDP growth is a collective windfall, and you'd expect it to be evenly distributed. But it clearly isn't.

[PaulDavisThe1st]

> Employee compensation comes from capital.

All human collective endeavors (with few exceptions) require 3 kinds of human-related input: capital, labor and ideas.

Nobody puts their capital into an endeavor in which the plan is for the that capital to provide renumeration for the labor for more than the shortest possible time (*). The goal is always to generate revenue in sufficient volume to pay for the labor, and when that goal is met, that success is a function of all 3 kinds of contribution.

So no, employee compensation does not come from capital, but from revenue that results from the successful interaction of capital, labor and ideas.

(*) non-profits would be an obvious exception, except that nobody actually talks about investing capital in such organizations, we just make "donations" or "grants". That money plays the same role as capital, however.

[krsw]

Also weaker worker rights, gig-economy, continued outsourcing, H1B exploitation to undercut wages (aka 'take 60k for this 110k job or go home idk'), just straight up bad wage growth in general (min wage pretty much stagnant since the 90's), stock market rewarding RiFs, massively decreased market regulation, more take breaks for the ultra-wealthy, cutting SNAP benefits, bonuses transitioning to RSUs- taking 3-5 years you vest...

[wolvesechoes]

> Automation, robots, software etc.

Nah, it is just capitalism at work. Winner takes all.

[cherryteastain]

"Top 10%" is such a misleading slice here. The guy who's at the 9.99th percentile is a normal salaried worker not doing better. The gains are entirely concentrated in the tiny billionaire slice buried inside that 10%. In fact wage growth for the top decile has been recently slower than bottom deciles [1]. Incomes still grow fast in the top decile, but mostly due to assets. And those assets are disproportionately in the hands of the billionaire slice of that top decile.

[1] https://www.epi.org/publication/strong-wage-growth-for-low-w...

[pessimizer]

The top 10% incomes have tons of assets, especially homes.

Saying that billionaires "disproportionately" have more assets than non-billionaires is a tautology that says nothing. You might as well say that tall people have disproportionately more height than people who are not tall. Billionaire is a statement about wealth, not income.

> In fact wage growth for the top decile has been recently slower than bottom deciles

Which is a very good thing, but also doesn't address anything. The bottom deciles live from their wages. The top decile either put most of their wages into assets, are already so wealthy that their wages don't matter, or live in luxury they can't afford.

The macroeconomic purpose of inflation as a tool is to lower the wages of high wage earners - because socially you can't really lower people's wages, at best you can refuse refuse them raises. It's easy to raise the income of lower deciles to offset inflation, either through legislation or safety net. Middle-high wage earners who do nothing under inflation face an effective pay cut.

> The guy who's at the 9.99th percentile is a normal salaried worker not doing better.

He is not normal, he is in the top 10%. His income triples or quadruples a median income. He is of course not doing better than himself, but he is doing better than 90% of other people by definition.

[cherryteastain]

Point is that income from dividends, rent and capital gains far outstrips the $150k the 90th percentile guy makes [1], which you have conveniently ignored. The $150k 90th percentile earner has more common with the $50k 50th percentile earner than he does with the billionaire earning $100M of capital gains, dividends and rent from assets. The 90th percentile guy is a wage laborer like the 50th percentile guy; they are effectively the same class. The only different class is the capital owning class.

Being able to afford a slightly nicer car or house does not change your class. Being able to influence elections, buy lobbying power, play power games, being in the "in" group of capitalism changes your class.

[1] https://dqydj.com/income-percentile-calculator/

[somenameforme]

Household income at the 90th percentile is about $250k per the US census. [1] And wealth disparities tend to be much larger yet still since a significant chunk of the $250k spending is going to go into things they have equity in like mortgage/low depreciation assets/etc, as opposed to food and rent. Especially in modern times where seemingly every industry is trying to figure out ways to charge rent while providing as little in return as possible.

Oligarchs have always been in their own class.

[1] - https://finance.yahoo.com/news/income-puts-top-10-earners-16...

[vondur]

Aren't most of the tech workers here part of that 10% and I'd assume they own houses in some of the most expensive areas, so they are technically part of the capital class?

[PaulDavisThe1st]

Being a part of the "capital class" does not mean simply having passed a net worth threshold.

It means having sufficient liquid capital that you can invest it in uncertain outcomes, generally without fear of poverty or perhaps any real negative effects on one's life at all.

Owning a very expensive home in a very high cost-of-living place (or even in a not-so-high cost-of-living place) does not place a person in that position.

[archagon]

You think most of the tech workers here own houses...?

[tancop]

defining classes is complicated. if you do it based on income percentile it will always be arbitrary and never reflect actual economic relations.

the most accepted way to divide in socialist circles is based off where your income comes from, your relation to capital. if you have to work for someone else thats working class (proletariat), if you can be independent you are professional or middle class, if you own the means of production for others that makes you a capitalist. owning a house is only capital class if you rent it out.

from that pov almost all tech workers are professional or working class. with founder ceos its more complicated because they own capital but also work for themselves through their company so you can take them as either. i guess it depends on if you like that person.

[eudamoniac]

What class is someone who is retired on savings but doesn't own any means of any production?

[porridgeraisin]

"I define things so that I'm in the good set and _they_ are in the bad set".

It's also utterly deranged even when you just consider that most tech workers get compensated with stock.

[smallmancontrov]

Your incentives come from where your money comes from. This is a pretty basic concept and it's absurd to brush it off as a form of No True Scotsman.

You can get money from both labor and capital. This is called "middle class." Don't let it melt your brain, but don't oversimplify to "you owned a stock so are capital class" either. Just give the labor/capital percentages (ordinary income / capital gains) and note how it leans.

New grad tech worker: 100%/0%

Mid career tech worker: 50%/50%

Late career tech worker: 10%/90%

Retired: 0%/100%

[porridgeraisin]

Exactly. The original comment in this thread asked if most tech workers here are part of the capital class themselves. Which was answered by saying that if you're employed by someone else, you are part of the worker class and thus tech workers are part of the worker class.

Introducing the fact that it's a spectrum and that equity ownership (which a vast majority of people in this industry have) makes you a capital owner is exactly my correction to that.

[smallmancontrov]

No. If you agree with the "percent of income/gains" framework we have no fundamental quarrel, but I want to point out that the way you phrased your point was indistinguishable from partisan economic-right opposition to this idea, which aims to bait people into betraying their class interest by understating their labor interest and overstating their capital interest. "You own some stocks in your 401k so you are capital class" is the usual argument, but the overwhelming majority of non-retired people with a 401k get more income from working than from the appreciation in their 401k and should vote accordingly.

[OGWhales]

They provided a decently accurate description of the working class vs the capitalist class. I don't think your reply fits here.

[lovich]

Most tech workers do not get compensated with stock. A fraction of the best compensated get stock. The next tier down get options with so many caveats that they are effectively worthless, and the tier below them are straight salary with no equity even entering the horizon for them.

And yea, once you start getting actual capital and start reaping the benefits of that wealth you start being identified as a capitalist in the socialist world view.

Edit: the comment I replied to originally had this sentence at the end

> Very typical for a certain type of folk. It's also utterly deranged even when you just consider that most tech workers get compensated with stock.

[porridgeraisin]

Eh? Which tech company doesn't give RSUs to fresh grads? Startups of course give options.

And how many american middle class+ (generalizing beyond tech workers) don't own equity?

[lovich]

You are in a bubble if you are surprised at the idea of companies not giving out stock, much less RSUs specifically. While it’s common in the big tech Silicon Valley companies there are thousands of other tech companies where the most they give are options, and I must repeat with a litany of caveats that make them effectively worthless, and even more where they only pay salary and have no way to gain equity at all.

I am in a lower tier of the market than Silicon Valley and after 15 years of making over six figure salary I have not been given a single stock, and none of my employees or members of my social circles that don’t work at FAANGs have either.

[officeplant]

Our corporation gives us worthless certificates for "money", that only pay out conditionally based on if the company gets re-evaluated for worth.

Our 401K match maxes out at $50 per paycheck.

[didgetmaster]

Every discussion about the 'top 10%' seems to make the underlying assumption that the set of people who fall under that category are consistent. While there are certainly individuals who enter the top 10% (or top 1%) and stay there; there are large numbers of people who move in and out of those categories.

For me personally, I am in the top 10%; but a few decades ago, I was not.

[PaulDavisThe1st]

The statistical evidence for your claim is not good. There is certainly a generational effect in that 5 year olds are typically not in the upper decile, simply because they generally have little to no individual wealth or income. But in the USA at least, most people die in the same decile they were born into.

[georgeecollins]

Exactly! And while a well off person may have a memory of a time in their life when they were not doing well (like in school, starting their career etc.) that can be misleading. You tend to end up like your parents more then was true three or four generations ago for many reasons: tax policy, less physical mobility, people tending more to marry with similar levels of education or income.

People debate how much social mobility there is in the US, but it seems pretty clear that the trend has been toward less mobility. The founding fathers of the US did not want to replace one aristocracy with another. Obviously there are some who think the change makes sense-- not me.

[bluefirebrand]

Something I've seen a lot is claims about individuals being self made, climbing the ladder from grit and ingenuity and such. Look at Bezos, he's an example of climbing the ladder! Or Zuckerberg!

And when you dig a bit more, you kinda find out this isn't really true?

I mean look at this AI summary of asking "Was Jeff Bezos born into wealth"

> Jeff Bezos was not born into wealth; his mother was a 17-year-old student and his adoptive father was an impoverished Cuban refugee who arrived in the U.S. alone at age 16. However, his maternal grandfather owned a large Texas ranch and later provided roughly $250,000 to help fund the launch of Amazon

Oh so his parents weren't wealthy only his grandparents. That's totally different

You know what my Grandpa gave me? A used car worth about 3 grand. Still amazing, I'm still very grateful to him! But the comparison here is absolutely not in the same league!

And I'm still a fortunate one, because many people get much less than a car from their families

[WarmWash]

The question is how many people get $250k from their family and lose it all.

Everyone's life is a mix of skill and luck, so to discredit skill, you would need to quantify the luck. An easy example is a lottery winner, a hard example is a Bezos. Any investor with the foresight to see what Bezos could do with grans money, would jump past her in line and give him triple.

[bluefirebrand]

> The question is how many people get $250k from their family and lose it all

I don't think that really matters? The fact that they even had that shot at all is such an incredible opportunity above people whose family simply cannot afford to even try

[WarmWash]

But if you have the skill to turn $250k into much more money, anyone with $250k and that knowledge will give it to you.

There are far far more stories of investors giving nascent broke startups money than families.

[grumpy_coder]

You have to have access to far more than $250k to be willing to blow that creating a startup. I may give my kids $250k for a house to live in. I do not have enough for them to yolo it on a dot com startup.

[mghackerlady]

This is bourgeois idealism. In reality, the people in the top 10% remain there and rarely fall

[jhoechtl]

This is a good point I haven't considered in the past and worth to take into the overall discussion.

[joe_mamba]

Here's what I found asking AI:

  US Household Wealth Distribution (Q1 2026, Fed DFA)

  Group       | Share of US Total Net Worth
  ------------|-------------------------
  Top 0.1%    | 14.4%
  Top 1%      | 31.6%
  Top 10%     | 67.9%
              | 
  Bottom 90%  | 32.1%
  Bottom 50%  | 2.5%

So, the top 10% holds roughly as much wealth as the bottom 90% combined.

The top 1% alone holds more than the entire bottom 90% minus the upper-middle segment.

To be in the top 10% you would need roughly 1,8 Million $ in assets (that's probably 90% of HN useerbase)

Basically, the bottom 50% are a slave class that doesn't even participate in the economy.

LE: The richest 20% are the only ones powering the U.S. economy, per Moody's Zandi. K-shaped economy all the way.

[didgetmaster]

Those numbers for 2026 may be right, but they absolutely do not mean that anyone who finds themselves in one of those categories must stay there.

While there are many people who are currently in the bottom 50% and will probably stay there; no one is a slave who has to stay there.

My original post (which is somehow unpopular on HN) points this out. I spent my first 30 years in that group and worked my way out of it.

[vannevar]

You are making the common mistake of confusing two different things: the absolute capacity for an individual to improve their income over their lifetime, and the relative capacity to improve based on their current decile. If progress depended solely on merit, you would expect economic growth to be more or less evenly distributed across the percentiles---the "rising tide raises all boats" idea. That this doesn't happen suggests that people in higher deciles not only have more wealth, but are more likely to acquire additional wealth. Many wealthy people---and even some poorer ones---maintain that this is because the wealthy must be more industrious. But the vast majority of wealthy people started life in the upper deciles. And it's clear that having wealth makes it easier to make more wealth.

If you doubt this, consider the following thought experiment: imagine two strangers, identical in ability. One wins a million dollars in the lottery, the other is poor. If you were forced to wager your net worth on which twin is likely to make the most money over the next 12 months, who would you bet on? Now think about what kind of qualities would it take to get you to change your bet. How much smarter and harder working would the man with nothing have to be to overcome the advantage of a million dollars? Or even $100,000? You might say, yes, maybe in one year money would have the advantage---but surely an advantage in industriousness would win out in the long run? The mathematical answer is no, because the lottery winner will have a bigger advantage at the beginning of year 2 than he did at the start. If you bet on him in year 1, the bet is even surer in year 2. The reality is that he will continue to pull away. And that's what we see in the real world distribution of wealth: the gap between the wealthiest decile and the next poorest continues to expand, creating increasing social and political strain, as we can plainly see today.

[joe_mamba]

>no one is a slave who has to stay there

That's like saying not everyone who finds themselves homeless must stay homeless, as if they can just choose to go buy a house.

>I spent my first 30 years in that group and worked my way out of it.

And what did the job market look like over the those 30 years versus today? You probably weren't competing with infinity AI bots at every resume application.

Not here to steal your thunder and deny your individual success story, but the tired "I pulled myself by my bootstraps" doesn't mean anything to the people who are strugling.

[didgetmaster]

The vast majority of the homeless in the US, are homeless by choice. They are addicted to drugs and/or refuse to get a job.

You don't have to be able to afford to buy a nice house in order to escape living on the streets.

You might think that my story is tired, but literally millions of people in this country have done the same thing. Telling people who are struggling that they can't improve, certainly doesn't help.