So why aren’t more Americans getting rich with it?
A lot of the answer has to do with who owns the wealth. Some money goes to people for working; some goes to people because they own businesses, stocks, buildings, land, machinery and software. The latest BLS report puts labor’s share of nonfarm business output at 52.9 percent, the lowest since records began in 1947.¹
Then look at who owns the pile. The richest four households out of every hundred own about half of America's wealth. At the very top, just 400 Americans were worth $6.6 trillion last year.⁵ The first eight names on the current billionaire list alone are worth roughly $2.4 trillion.⁶
Think about that.400 people own more than the bottom 74 million American households combined.⁷ Just eight people own more than the combined wealth of roughly 150 million Americans.
America isn’t short of wealth. An extraordinary amount of it is simply sitting at the top.
Ownership also has one enormous advantage. Stocks rise, dividends arrive and property appreciates. You can borrow against what you own and pass it on to your children. Long-term capital gains generally get better tax treatment than ordinary wages, and once you own a lot, the advantage starts feeding itself.⁸
A paycheck has to be earned over and over again. Wealth keeps working after you go to bed.
Eventually all that money buys something more useful than another house. It buys influence. America saw that during the Gilded Age, when Rockefeller, Carnegie, Vanderbilt and Morgan built extraordinary companies, made extraordinary fortunes and accumulated extraordinary power.⁹
Over the decades that followed, America built institutions that spread economic power more widely: antitrust laws, progressive taxes, stronger labor protections, Social Security, pensions, mass education and broad home ownership. They helped create the huge American middle class that later generations came to think of as normal.
It wasn’t normal. We built it.
Now artificial intelligence may force us to build the next version, and this is where I think much of the argument over AI goes wrong. AI is often portrayed as the problem because it may take jobs. But if a programmer can do in an afternoon what once took a week, if a doctor can diagnose faster, if an accountant can finish in an hour what once took a day, or if a factory can make twice as much with the same number of people, we have created wealth. That is exactly what technology is supposed to do.
AI could make us fantastically rich. The question is who gets the money.
Jack Dorsey gave us a pretty good preview in February. Block, the company behind Square and Cash App, announced that it would cut more than 4,000 jobs, nearly half its workforce, as it pushed AI across the company. Dorsey’s explanation was remarkably blunt: “A significantly smaller team using the tools can do more and do it better.”¹⁰
Block wasn’t dying. Its quarterly gross profit had grown 24 percent, and investors saw the prospect of fewer workers and higher productivity as good news. The stock jumped about 25 percent in after-hours trading.¹⁰
There, in one afternoon, is the whole argument. AI did what it was supposed to do: it made it possible to produce more with fewer people. More than 4,000 jobs disappeared from the payroll while investors decided the company had become more valuable.
Who got the gain?
That isn’t an argument against AI. Quite the opposite. If AI lets us produce much more with much less work, we should celebrate it. For generations, though, most Americans have gotten their piece of the economy through a paycheck. You work, somebody pays you, and that money lets you buy some of what everybody else produces.