A New Gilded Age? How Trickle-Down Economics Left Millennials and Gen Z Behind
It was an era of rapid economic growth, industrialization, and political corruption. In the late 19th century, the United States entered a period of transformation that became known as the Gilded Age. On the surface, it appeared to be a golden era of progress, fuelled by industrial expansion and endless profits. Yet beneath the shimmer of wealth and innovation laid a deeply fractured society. While titans like Rockefeller and Carnegie amassed fortunes that reshaped the American economy, millions of workers toiled for starvation wages, seeing little of the prosperity they helped create.
The Gilded Age wasn’t just about wealth — it was a system built on economic and political dominance. The elite controlled not only industries but also the government itself, wielding their influence to entrench power and privilege at the top. For the average person, economic mobility was a distant dream, and the divide between the wealthy and the working class became a chasm that few could cross. Wealth and political power operated hand in hand, with policies favouring industrialists at the expense of the working class.
This eery tale sounds all too familiar. Just as industrialists of the past shaped policies to suit their own interests, modern billionaires and elites are doing the same — only now, they’re stepping directly into public office. Figures like Donald Trump, Elon Musk, and Dr. Oz exemplify how wealth and celebrity status is used not just to wield influence but to actively shape governance. These modern elites, often disconnected from the struggles of the middle and working classes, reinforce a system where political and economic power is increasingly concentrated at the top. Today, many Americans describe a growing discrepancy between the “economy’s” supposed success and their own. While billionaires accumulate record-breaking wealth and the stock market reaches new highs, average households are left struggling with stagnant wages, rising costs, and a sense of economic instability.
Though we theoretically live in one interconnected economic system, the reality is far more fragmented. The “elite,” “middle class,” and “working class” occupy three distinct sub-economies, each with its own rules, privileges, and barriers. Thanks to decades of trickle-down economics, wealth continues to flow upward rather than downward, often cycling through the elite economy without ever reaching the broader population. The result is a system where fewer and fewer people can mobilize upward.
The top 1% now owns more than half of the stock market, wields outsized political influence, and has access to opportunities that most people will never see. Meanwhile, the so-called middle class — once the backbone of economic stability — is shrinking under the weight of rising housing costs, stagnant wages, and diminishing entry points to wealth. For the working class, upward mobility is increasingly a fantasy, as each successive generation faces steeper barriers than the one before.
The question is no longer whether we are heading toward another Gilded Age — but whether we are already living in one.
The Three-Tier Economy
The modern economy has splintered into three distinct tiers: the elite, the middle class, and the working class. These “sub-economies” operate almost independently, with vastly different realities for those within them.
At the top, the elite economy thrives. Billionaires and major corporations dominate this tier, accumulating vast wealth and wielding disproportionate political influence. They own over half of the stock market, benefit from tax advantages on capital gains, and enjoy a level of economic security that shields them from downturns. For those in this tier, wealth grows exponentially, further concentrating power into their hands.
The middle-class economy, long considered the backbone of economic stability, is shrinking. Historically, the middle class grew as workers were able to move up from the working class, thanks to accessible pathways like affordable housing, higher education, and stable, well-paying jobs. However, these pathways are eroding. Rising costs for homes, education, and healthcare — coupled with stagnant wages — have made it harder for working-class families to ascend to the middle class. At the same time, many middle-class families are being pushed downward into the working class, often due to job losses, unexpected expenses, or debt. While a small fraction of the middle class has managed to move up into the elite tier, far more have fallen downward, and upward mobility has become the exception rather than the rule.
The working-class economy has borne the brunt of these changes. Once, the working class could aspire to join the middle class by leveraging union protections, stable blue-collar jobs, and affordable public services. Today, these opportunities are all but gone. Precarious, low-wage work dominates this tier, offering little job security or upward mobility. Rising living costs eat away at wages, leaving working-class families stuck in cycles of financial insecurity. The few who manage to climb into the middle class often do so at great personal sacrifice, and the risk of slipping back is ever-present.
The Generational Divide
This fractured economy hits younger generations — Millennials and Gen Z — particularly hard. For previous generations, the transition from working class to middle class was achievable. Affordable housing, secure employment, and accessible education created opportunities for upward mobility. Today, however, these pathways are becoming increasingly narrow:
For Millennials and Gen Z, the promise of upward mobility feels increasingly unattainable. While their grandparents may have moved from factory floors to suburban homes, today’s younger generations often find themselves stuck in precarious, underpaid jobs with no clear path forward.
At the same time, downward mobility has never been easier. For those in the middle class, a single setback — whether a job loss, a medical emergency, or unexpected debt — can lead to financial precarity. Falling out of the middle class is far more common than climbing into it, and those who slip often find it nearly impossible to return.
The result is a shrinking middle class and a growing divide between those who are secure at the top and those left struggling at the bottom. This system, shaped by decades of economic policy, has created a fractured economy where opportunities for upward mobility are rare, and downward mobility is a constant threat.
How Trickle-Down Economics Split The Economy
The promise of trickle-down economics was simple: reduce taxes and regulations for the wealthy and corporations, and their increased investments and spending would “trickle down” to benefit everyone. But in practice, wealth hasn’t flowed downward — it has funnelled upward, getting stuck in the elite economy and staying there.
Wealth Gets Stuck: Under trickle-down policies, wealth continues to accumulate at the top, cycling within the elite economy without reaching the middle or working classes. The elite class — comprised of billionaires, corporations, and institutional investors — engages in an economic loop where money circulates almost exclusively among themselves. Stock buybacks, luxury investments, speculative trading, and real estate acquisitions are common activities in this tier, keeping wealth concentrated in their hands.
Instead of creating jobs or raising wages, much of this wealth is used to acquire more wealth. For example, corporations often use profits to buy back their own stocks, driving up share prices and enriching executives and shareholders. Similarly, wealthy individuals invest in high-yield assets, further increasing their capital while avoiding taxable income streams. This creates a feedback loop where money flows into the elite tier but rarely leaves it.
Trickle-Up, Not Trickle-Down: What’s worse, the system isn’t just stagnant — it actively pulls wealth from the lower tiers. Rising housing costs, student loan payments, and stagnant wages extract money from the middle and working classes, funnelling it upward into the hands of landlords, banks, and investors. This flow of money from the bottom to the top means that any wealth created in the lower tiers is quickly absorbed into the elite economy, leaving less for families to save or invest in their futures.
The Middle Class is at Risk: The middle class is the most vulnerable tier in this fractured economy. Without deliberate intervention, the middle class risks being absorbed into the working class entirely, leaving a society divided into two extremes: a small, insulated elite class and a vast, struggling working class.
As middle-class families face rising costs, stagnant wages, and reduced access to upward mobility, their ability to maintain financial stability diminishes. Those who slip out of the middle class often find it impossible to climb back, as the pathways that once existed — affordable housing, stable employment, and accessible education — have eroded.
This erosion is not just an economic issue but a systemic transformation. As the middle class shrinks, the divide between the elite and the rest of society grows. A two-tier economy emerges: one where the elite hoard resources and power, while everyone else competes for survival in a working-class economy with few opportunities to thrive.
Elites Have No Incentive to Shift Wealth Downward: The reality is that the elite class has little incentive to redistribute wealth downward. With concentrated economic and political power, the elite benefit from the status quo. Progressive taxation, historically used to redistribute wealth and fund public goods, has been eroded under decades of trickle-down policies. Corporate tax cuts and lower capital gains taxes have reduced the elite’s tax burden, allowing them to accumulate even more wealth while contributing less to the broader economy.
In the absence of government intervention — such as progressive taxation, investment in public infrastructure, or higher wages — this system will continue to stagnate. The elite will remain insulated from economic downturns, while the rest of the economy suffers under mounting inequality.
The Broken Flow of Wealth
Rather than circulating throughout the economy, wealth under trickle-down policies moves in one direction — upward — and gets trapped. This creates a fractured system where:
领英推荐
If left unchecked, this system will eventually consolidate into two economies, where the middle class no longer exists. The elite will retain wealth and power, while the rest of society competes in a stagnant, resource-scarce system, with little hope of mobility or security.
Newer generations are particularly vulnerable, since they are entering a system where the most entry points into the middle class have already been closed. Children of affluent parents who are able to help them purchase a home, teach them how to invest, or give them the best education are the most insulated and able to access the middle class or higher. As inequality continues to grow and entry points continue to narrow, the generational gap widens and entering into the middle class continues to become more difficult to every subsequent generation.
This isn’t just a flaw in the system — it’s the system itself. Without deliberate policy changes to redistribute wealth downward, such as progressive taxation or investments in public services, the three-tier economy will collapse into a rigid two-tier structure, deepening inequality for generations to come.
Trick-Up Economics
The fractured economy we live in today isn’t inevitable — it’s the result of deliberate policies that concentrated wealth at the top while leaving the middle and working classes to fend for themselves. Reversing this trend requires rethinking our approach to economics. By focusing on policies that redistribute wealth, rebuild entry points to economic mobility, and create stability for the working and middle classes, we can break the cycle of inequality and build a system that works for everyone.
Progressive Taxation to Redistribute Wealth
One of the most effective ways to reverse the flow of wealth upward is through progressive taxation. By ensuring that the wealthy contribute a fair share to public resources, progressive taxation can fund critical programs that benefit the broader population. For example:
Without progressive taxation, wealth will continue to circulate in the elite economy, never reaching those who need it most.
Guaranteed Basic Income (GBI) to Create Stability
Guaranteed Basic Income offers a direct solution to financial insecurity by providing everyone with a guaranteed baseline income. For the working class, GBI can serve as a safety net, reducing dependence on low-wage, precarious jobs. For the middle class, it can provide a buffer against unexpected financial shocks, preventing downward mobility. By creating a foundation of stability, GBI empowers individuals to pursue education, entrepreneurship, or other opportunities that can lead to upward mobility.
Affordable Housing to Rebuild the Middle Class
Housing is one of the biggest barriers to upward mobility — and one of the most pressing areas for reform. Policies that:
Affordable housing isn’t just a policy goal — it’s a cornerstone of economic stability.
Labor Protections and Living Wages
To rebuild pathways to the middle class, we need to strengthen labor protections and ensure that all workers earn a living wage. Policies like:
Rebalancing the Economy
Human Economics isn’t just about fixing symptoms — it’s about creating a system where the economy works for everyone. By focusing on redistribution, opportunity, and stability, we can shift wealth and power from the elite tier back into the broader economy, revitalizing the middle class and giving the working class a fair shot at upward mobility.
A Path Forward
Implementing these policies won’t just improve individual lives — it will strengthen the entire economy. A thriving middle class drives demand, fuels innovation, and creates a more equitable and sustainable future. Without intervention, the current system will continue to collapse into two economies: one for the elite and one for everyone else.
Human Economics offers a way out of this cycle. By prioritizing people over profits and equity over endless accumulation, we can create an economy that works for all generations — not just the privileged few.
What do you think? The challenges we face today — shrinking economic mobility, rising inequality, and a fractured economy — affect us all, but in different ways. Whether you’ve experienced the decline of the middle class firsthand, struggled to make ends meet, or seen the system work in your favour, your perspective matters.
How has the current economy shaped your life and your generation’s experience? Whether you’re a Baby Boomer, Gen X, Millennial, or Gen Z, your voice is an essential part of this conversation. Let’s bridge the gaps in understanding and work together to envision an economy that works for everyone. Share your thoughts in the comments!
You can also follow me on The Medium: @TheHumanEconomist