Archive · 24 Nov 2025
Americans feel poorer despite rising incomes
Americans are earning more money than ever before, but many still feel like they're not doing well.
This is because even though more people are making a lot of money, the very rich are getting much richer much faster.
Things like healthcare, education, and housing cost a lot more, and people are worried that this good economic time might not last.
Some people think the economy is rigged against them, which is making politicians want to tax the rich more.
But if we tax the rich too much, it might slow down the economy, and that could be even worse.
Americans have never been richer, with significant income and wealth growth over the last 50 years.
The middle class is shrinking, with more people moving into the upper-middle class and fewer in the lower income brackets.
Income inequality has increased, with the top 5% and especially the top 1% seeing much larger income gains.
Reasons for income growth include neoliberal economic policies, increased productivity, GDP growth, low inflation, decline in unionization, more college graduates, aging population, and welfare benefits.
Despite rising incomes, many Americans feel poorer due to high costs of healthcare, education, and housing, and anxiety about future earnings.
- Who
- Americans, particularly the middle and upper-middle classes.
- What
- A perception of economic inequality and a sense of not benefiting from economic growth despite rising incomes.
- When
- Over the last 50 years, with significant changes in the last two decades.
- Where
- United States.
- Why
- Due to the nature of income growth, increased costs of essential services, and a sense of zero-sum competition among the affluent.
- Income Growth
- Americans have never been richer, with significant growth in income and wealth over the last 50 years.
- Income Distribution
- In 1967, 5% of Americans earned more than $150,000 (in 2024 dollars); now 30% do. In 1967, 38% earned less than $50,000; now 21% do.
- Income Inequality
- The top 5% and especially the top 1% have seen much larger income increases than the rest.
- Reasons for Income Growth
- Neoliberal economic policies, increased productivity, GDP growth, low inflation, decline in unionization, more college graduates, aging population, and welfare benefits.
- Challenges
- High costs of healthcare, education, and housing, anxiety about future earnings, and a sense of zero-sum competition among the affluent.
- Economic Policy
- Rising incomes aren't always enough to engender good feelings about the economy, leading to populism and potential policy changes.
- Trade-off
- There is a trade-off between growth and equality, with punitive taxes on the rich potentially harming economic growth.