Remaining Stable: Labor's Share of Income Stays Constant

The video discusses the misconception that labor's share of the economy is decreasing, explaining that when adjusted for depreciation and changes in self-employment income measurement, labor's share has remained stable since 1948. The video highlights the difference between gross and net income, emphasizing the impact of depreciation due to increased use of technology. It also addresses concerns about income distribution, noting that while income has grown at the top and bottom, the middle class has seen less growth.

What is the main reason the Bureau of Labor Statistics data appears alarming regarding labor's share of income?

• It is based on net income.

• It includes depreciation in gross income.

• It excludes capital income.

• It uses outdated economic models.

What adjustment is made to the data to show that labor's share has been stable since 1948?

• Excluding capital income entirely.

• Switching from net income to gross income.

• Adjusting for depreciation and self-employment income.

• Including only self-employment income.

How did the Bureau of Labor Statistics change its measurement of self-employment income after 2001?

• Decreased the labor income portion to 50%.

• Excluded self-employment income entirely.

• Increased the labor income portion to 90%.

• Considered all self-employment income as capital income.

What is a significant factor contributing to the rising share of depreciation in the economy?

• Longer lifespan of modern equipment.

• Decreased investment in technology.

• More frequent replacement of computers and high-tech machines.

• Increased use of long-lasting machinery.

What pattern does the Congressional Budget Office data show about income growth over the past generation?

• A steady increase across all income levels.

• A decline in income growth for all levels.

• Uniform growth in the middle income levels.

• A U-shaped growth with faster growth at the top and bottom.