The concentration of wealth and power in the hands of a few is raising concerns that the United States is entering a new Gilded Age, a period in the late 1800s marked by rapid industrialization and significant wealth disparity. As workers face layoffs and stagnant wages, CEOs and shareholders continue to accumulate hundreds of billions in profits, leading some experts to draw parallels to the past. A recent report by Oxfam, a British nonprofit focused on eradicating poverty, analyzed more than 200 U.S. corporations and found that 90% of their combined net profits went to wealthy shareholders.
CEO pay has also seen a significant increase, ballooning by 31% from 2018 to 2022. Irit Tamir, a senior director at Oxfam America, highlighted the disparity, pointing out the strong presence of corporate lobbying that has resulted in reduced company taxation. Despite economic strain being frequently cited as a reason for widespread layoffs, corporations appear to be faring better than ever.
Revenue and profits at many major companies have grown significantly from 2014 to 2022, with a notable surge following the pandemic. For instance, while Meta’s CEO Mark Zuckerberg announced layoffs for over 10,000 workers, the company also introduced a fresh stock-buyback option. The report underscores how stock buybacks, once banned, became legal in the 1980s, enabling companies to inflate their stock prices.
Concurrently, corporate tax rates fell dramatically due to numerous tax cuts, reinforcing the consolidation of power at the top. This concentration of wealth has led to a scenario where the majority of profits benefit a few, while workers face job insecurity. Tamir pointed out that the decline in union membership since the 1970s has further disadvantaged workers.
However, there have been some promising signs of change, such as a rise in unionization following a summer of strikes and high-profile wins for workers. Despite this, the wage gap continues to widen, with CEO-to-worker pay ratios at companies like McDonald’s reaching 1,745 to one.
Economic inequality echoing a past era
The divide is especially pronounced in the retail sector, where the top leaders are often white men, contrasting with a workforce predominantly composed of people of color and women. Many companies have made public commitments to diversity, equity, and inclusion targets, but few have provided transparent data on their progress. Historian Edward O’Donnell noted that while the Gilded Age was marked by extravagance, it was also characterized by feelings of uncertainty driven by the working class.
“The Gilded Age is very much a tale of two kinds of America. One where things are going great,” he said. “And at the same time, there’s a lot that people are saying we seem to be heading in a really dark direction.”
Similar to the Gilded Age, we’re seeing unions battle big corporations, increasing concerns about wealth inequality, and anxiety over immigration.
With the upcoming election highlighting economic anxiety and an increasing number of billionaires in the U.S., some historians believe we may be experiencing a second Gilded Age. Janelle Jones, vice president for policy and advocacy at the Washington Center for Equitable Growth and the first Black woman to become the U.S. Department of Labor’s chief economist, said the current level of inequality is “unsustainable.”
“Over the past 45 years, CEOs have made over a thousand times more than a typical worker,” Jones said. “For the typical worker, the pay has only increased 24%.
Last year, CEOs made more than 300 times the typical worker.”
Jones believes achieving greater wealth equality will require federal policy. “After the COVID pandemic and the recession, we started to see the way that policy can make sure there’s a floor for everyone,” she said. “We started to see the way that it can raise living standards for everyone.”
Ultimately, concentrating wealth in the hands of a few is not sustainable for an economy, Tamir warns.
Even the wealthiest will suffer in the long term if this trend continues. Addressing these inequalities is crucial for the health of both the economy and society.
