Wages Are Falling. Wealth Is Surging. No Wonder Americans Are Unhappy.

Two events from the past week help crystallize this strange, contradictory moment for the U.S. economy.

On Wednesday, the Bureau of Labor Statistics reported that the surge in energy prices had wiped out a year and a half of wage gains for the average American worker. On Friday, the public-markets debut of SpaceX made Elon Musk the world’s first trillionaire.

That stark juxtaposition helps explain why many Americans, in survey after survey, say they no longer believe the U.S. economy is working for them. A few people are getting fabulously, unimaginably wealthy at the same time that entire generations of families worry that they will never be able to afford to buy a house, raise children or enjoy a comfortable retirement.

“I don’t think the stock market is necessarily causing” Americans’ pessimism about the economy, said Stefanie Stantcheva, a Harvard University professor who studies public sentiment. “But I don’t think people are looking at it and are thinking, ‘Great, this means I’m going to do very well, too.’ It’s potentially reinforcing this feeling of ‘I’m falling behind.’”

Inequality is hardly a new feature in America. But the explosion of wealth at the very top is without precedent in U.S. history. At the height of the Gilded Age at the end of the 19th century, the richest handful of Americans had a net worth equivalent to about 3% of the country’s annual economic output, according to data compiled by French economists Gabriel Zucman and Emmanuel Saez. Today, the fortunes of the same 0.00001% — about 20 individuals — make up roughly four times as large a share, equivalent to 12% of annual output.

Other economists, using different methodologies, come up with somewhat different numbers. But hardly anyone disputes the basic fact that the wealthiest few have made extraordinary gains in recent years.

The picture for the other 99% of Americans is more nuanced. More than half of U.S. households own stocks, either directly or through retirement accounts, meaning they have benefited at least somewhat from the record-setting run-up in share prices. Wealth has risen more slowly for middle-class families than for the rich over the past decade, Federal Reserve data shows, but it has still risen.

For most Americans, however, “wealth” is a somewhat abstract concept, tied up in the house where they live and the retirement accounts they hope to leave untouched for as long as possible. What matters more, day to day, is their income. And the share of national income going to workers has been trending down for decades. It hit a record low in the first quarter of the year, according to data from the Commerce Department.

Now rising costs are again taking a bite out of workers’ paychecks. The recent jump in energy prices — a result of the war with Iran — pushed the annual inflation rate to a three-year high in May. Hourly wages, adjusted for inflation, have fallen for three months in a row, erasing all the gains made during President Donald Trump’s first year in office. Measures of consumer sentiment have plummeted as gas prices have risen.

Oil prices have eased somewhat in recent weeks on hopes of a lasting ceasefire and are likely to fall further if the United States and Iran reach a deal and tankers begin to move out of the Persian Gulf through the Strait of Hormuz in greater numbers.

But relief at the pump is not likely to end Americans’ anxiety after years of one economic shock after another. First, the COVID-19 pandemic shut down large parts of the economy and put tens of millions of people out of work, at least temporarily. Then inflation soared to the highest level in four decades. Since then, Americans have endured high interest rates, tariffs and repeated recession scares.

“If you think about what it felt like to go through COVID, and then inflation, and also political unrest and instability, you come out of those things thinking, ‘How am I supposed to plan for the future?’” said Elizabeth Wilkins, president of the Roosevelt Institute, a left-leaning think tank.

Now Americans face a new threat in the form of artificial intelligence, which tech industry leaders warn could eliminate whole categories of white-collar work. Many economists are skeptical of those predictions, but polls show that many workers are worried about what the technology will mean for their careers. Voters across the country have also rebelled against plans to build AI data centers in their communities, citing their impact on electricity bills, water supplies and air quality.

Given those concerns, it is hardly surprising that the public is uncomfortable with the surge in wealth that has accompanied the AI boom. Companies connected to the technology have driven the recent gains in the stock market. SpaceX’s debut Friday was the first in what is expected to be a series of giant initial public offerings for AI companies. (SpaceX, though best known for its rockets and satellites, also owns an AI lab and has made huge investments in AI infrastructure.)

In addition to making Musk a trillionaire, the SpaceX IPO alone was expected to mint thousands of new millionaires and several billionaires.

“Many of the tech moguls who are the current superrich have not helped themselves in the conversation by saying, ‘My innovation is going to obliterate your life,’” said Glenn Hubbard, an economist at Columbia Business School who served as a top adviser to President George W. Bush. “It’s not too crazy to imagine a backlash.”

Hubbard said he did not necessarily see a problem with the existence of billionaires or even trillionaires, as long as people were getting rich through entrepreneurship and innovation rather than through corruption or cronyism. But he said policymakers should take the public attitudes seriously. Congress should consider ways to tax billionaires more effectively, he said, and to ensure that the wealthy don’t exert undue influence on the political system.

Many progressive economists, however, argue that enormous fortunes like Musk’s inherently distort the economic and political systems, giving the superrich too many ways to avoid regulation, taxation and oversight.

“It’s the power to influence markets. It’s the power to buy competitors. It’s the power to influence policymaking,” said Zucman, one of the French scholars of wealth inequality. “If you want a well-functioning market economy, it’s not good to have too much concentrated power with extreme wealth at the very top. It distorts markets. It distorts democracy.”

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This article originally appeared in The New York Times.

By Ben Casselman/Karsten Moran

c.2026 The New York Times Company

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