Cost of Living & Wages|March 18, 2025|10 min read

The Widening Wealth Gap: Understanding the US Economic Divide

The top 10% now control 70% of the US. The increasing divide between the wealthy elite and everyone else is not by chance—it's by design. Here's what drives it and what must change.

The Widening Wealth Gap: Understanding the US Economic Divide

The Rich Get Richer. The Rest of Us Get Left Behind.

Let’s not sugar-coat it: the American economy is rigged. For decades now, the wealthiest in society have been pulling further and further ahead—while ordinary families are stuck in a never-ending struggle to keep their heads above water.

This isn’t just about who owns a fancy house or drives a nice car. It’s about how money and power have become so concentrated at the top that it’s warping the entire economy—and putting the future of millions at risk.


The System Isn't Broken—It's Working Exactly as Designed

If you’re wondering why your rent is sky-high, your wages haven’t budged, and everything seems to be getting more expensive, here’s the hard truth: it’s all linked to wealth inequality.

And no, this didn’t just “happen.” It’s the result of deliberate economic policies that funnel wealth upwards:

  • Low interest rates and money printing after the 2008 crash and again during COVID didn’t flow into workers’ pockets. That money went into the hands of asset owners—the rich.
  • Stock markets soared. Property prices exploded. Meanwhile, wages stagnated, and ordinary people were left scrambling.
  • Passive income exploded for the wealthy—returns from rent, dividends, and capital gains outpaced any salary a normal person could earn.

Simply put, the rich aren’t just richer because they work harder. They’re richer because the economy has been restructured to reward owning wealth, not working for it.


Why Wealth Inequality is Killing the American Dream

The American Dream used to mean home ownership, stable jobs, a chance for your kids to do better than you. Now?

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  • Millennials are the first generation expected to be poorer than their parents.
  • Homeownership is increasingly out of reach—institutional investors are buying up houses and pricing out families.
  • More and more people are living paycheque to paycheque—not because they’re irresponsible, but because the cost of living keeps rising faster than wages.

And here’s the kicker: while you’re struggling to afford eggs, billionaires are buying yachts, politicians are cutting taxes for the ultra-wealthy, and Wall Street is raking in record profits.


What Happens When an Economy Stops Serving the Majority?

When most of the money ends up in the hands of a tiny elite, that money doesn’t flow back into the real economy. It gets parked in luxury assets, offshore accounts, and speculative investments.

This is a huge problem because:

  • The rich don’t spend like ordinary people. One billionaire hoarding cash does nothing for economic growth.
  • Middle-class spending drives demand. If the majority can’t afford to spend, the economy slows.
  • Inequality creates instability. People lose trust. Social cohesion breaks down. Polarisation rises.

Just look at what’s happening now: student debt crises, housing shortages, strikes across multiple sectors, and skyrocketing mental health issues. These aren’t random—they’re symptoms of a system that has stopped working for everyday Americans.


The Illusion of Growth

Politicians love to brag about “GDP growth.” But who is that growth really benefitting?

For most, it’s not translating into better lives. That’s because the way we measure economic success hides the fact that the spoils of growth go to the top.

Imagine this:
If the economy grows by 3%, but 90% of the gains go to the richest 1%, what’s left for the rest of us? Not much.

It’s no coincidence that wealth inequality in the US is at levels not seen since the Great Depression. The top 1% now own more wealth than the bottom 90% combined.


The US Isn’t Broke—It’s Just Choosing Who to Save

Let’s kill the myth that “we can’t afford” to fix this. The US government found trillions to bail out banks and stimulate markets during COVID. The money is there—it’s a matter of priorities.

We could be investing in:

  • Affordable housing
  • Universal healthcare
  • Debt relief and better public infrastructure

But instead, we get tax cuts for billionaires, deregulation, and austerity threats.


The Takeaway: It’s Not Just Unfair—It’s Unsustainable

This level of inequality isn’t just unjust—it’s economically toxic. When ordinary people can’t afford homes, can’t save, and can’t spend, the economy suffers. And when all the power lies with the ultra-rich, democracy itself begins to crack.

This isn’t about envy—it’s about survival. A healthy economy needs a strong middle class, not just a handful of billionaires hoarding more wealth than entire nations.

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