Capital vs. labor in Minnesota -- a look at personal income

One of the insights from Thomas Piketty's book "Capital in the 21^st Century" is that inherited wealth is growing in importance while wealth generated by labor is declining. And I quote:

I'm in no position to replicate Piketty's research, but I thought I'd take a narrow look at income in Minnesota over the past 60 years, and try to figure out whether income from capital (rent, dividends, interest, capital gains) is outpacing income from labor (wages, salaries, bonuses).

Again, this is not an attempt to refute Piketty's claims, just an attempt to get a grasp on how one of the concepts has played out in our state.

Here's what the data shows:

As you can see, labor's share of income is declining long term, and income from capital as a share of all income in Minnesota grew pretty quickly in the late 1970s and early 1980s, at the expense of labor. But capital's share of income has been flat since. What has grown is transfer payments, which are defined here. They are government benefits, including health care, and lots of other stuff.

So capital is producing a larger share of all Minnesota income than it was in 1953, but not as much as in 1983.