Fed Governor Barr: Labor Share of U.S. Income Falls to Record Low 52.8%, Super Intelligence Could Widen Inequality
Federal Reserve Governor Michael S. Barr delivered a speech on super intelligence and inequality in a virtual conversation on November 12. Drawing on the Federal Reserve's 2025 Survey of Consumer Finances, published last month, Barr said wealth and income in the United States are highly concentrated: the top 10 percent of households by income receive almost one-half of all income and the top 1 percent about one-fifth, while the wealthiest 10 percent hold nearly three-fourths of all wealth and the top 1 percent about one-third, nearly $60 trillion.
The bottom half of households by wealth hold just over 2 percent of all wealth, an average of $52,000, Barr said, while the top 0.1 percent, only about 135,000 households, own one-sixth of the nation's wealth. A household at the lower edge of the top 1 percent has $16.3 million, 75 times the $215,000 of a household in the middle. Another annual Fed survey found that 31 percent of respondents in 2025 did not have cash to cover an emergency expense of $500 or more. Citing Forbes, Barr said the United States counts nearly 1,000 billionaires, and the 400 wealthiest individuals' share of total wealth rose from 3 percent in 2022 to 4 percent in the most recent survey.
Barr said the labor share of national income was fairly steady between 60 percent and 65 percent after World War II, began falling in 2001, and dropped especially steeply after the pandemic, reaching a record low of 52.8 percent in the second quarter of 2026. He cited three causes: technology replacing labor, increased market concentration in three-quarters of U.S. industries since 2000, and reduced bargaining power for workers.
On super intelligence (SI), Barr said it could prove to be capital-biased innovation in which returns go primarily to capital: if a small number of hyperscalers and frontier labs dominate the market and receive the lion's share of investment returns, the labor share would decline further and inequality would rise. So far, he said, there has been relatively little displacement of workers by SI and significant evidence that it is enhancing some workers' productivity, though there are signs it may be substituting for labor in some sectors, especially for younger, less experienced workers, and broad, competitive access could mean the benefits are more widely shared.
"In my judgment, now is the time for society to begin to consider how to address these potential challenges, while AI adoption is in its relatively early stages, so we can realize the long-term benefits for society," Barr said. He noted the views expressed were his own and not necessarily those of his colleagues on the Federal Reserve Board or the Federal Open Market Committee.
(Source: Federal Reserve)
Source: Federal Reserve
Published by GSM · USA (original Chinese edition)
Photo: 图：美联储总部埃克尔斯大楼正面，位于华盛顿。Wikimedia Commons 文件「Eccles Building (26088200676).jpg」，公共领域。 / Photo: The front of the Federal Reserve's Eccles Building headquarters in Washington. Wikimedia Commons file 'Eccles Building (26088200676).jpg', public domain.
