This divide is expected to widen after President Donald Trump’s sweeping new spending bill drastically cuts Medicaid and food aid, programs that stabilize the economy and subsidize low-wage employers.
Moreover, the tax cuts at the heart of the bill will deliver tens of billions of dollars in benefits to the wealthiest households while disproportionately burdeninglow-income households, according to analyses by the nonpartisan Congressional Budget Office and Joint Committee on Taxation. By 2033, the bottom 20% will pay more in taxes while the top 0.1% receive $43 billion in cuts.
I am a sociologist who studies economic inequality, and my research demonstrates that the class-based inequalities exacerbated by the Trump bill are not new. Rather, they are part of a 50-year trend linked to social cleavages, political corruption and a declining belief in the common good.
The roots of class-based inequality
The decades following World War II were broadly prosperous, but conditions began changing in the 1970s. Class inequality has increased enormously since then, according to government data, while income inequality has risen for five decades at the expense of workers.
Economists usually gauge a country’s economic health by looking at its gross domestic product as measured through total spending on everything from groceries to patents.
But another way to view GDP is by looking at whether the money goes to workers or business owners. This second method – the income approach – offers a clearer picture of who really benefits from economic growth.
The money that goes to labor’s share of GDP, or workers, is represented by employee compensation, including wages, salaries and benefits. The money left over for businesses after paying for work and materials is called gross operating surplus, or business surplus.
The share of GDP going to workers rose 12% from 1947 to 1970, then fell 14% between 1970 and 2023. The opposite happened with the business surplus, falling 18% in the early postwar decades before jumping 34% from 1970 to today.
Meanwhile, corporate profits have outpaced economic growth by 193% since 1970. Within profits, shareholder dividends as a share of GDP grew 274%.
As of 2023, labor had lost all of the economic gains made since 1947. Had workers kept their 1970 share of GDP, they would have earned $1.7 trillion more in 2023 alone. And no legislation or federal action since 1970 has reversed this half-century trend.
When more of the economy goes to businesses instead of workers, that poses serious social problems. My research focuses on three that threaten democracy.
1. Fraying social bonds and livelihoods
Not just an issue of income and assets, growing class inequality represents the fraying of American society.
For instance, inequality and the resulting hardship are linked to worse health outcomes. Americans die younger than their peers in other rich countries, and U.S. life expectancy has decreased, especially among the poor.
Moreover, economic struggles contribute to mental health issues, deaths of despair and profound problems such as addiction, including tobacco, alcohol and opioid abuse.
Inequality can disrupt families. Kids who experience the stresses of poverty can develop neurological and emotional problems, putting them at risk for drug use as adults. On the other hand, when minimum wages increase and people begin saving wealth, divorce risk falls.
Research shows inequality has many other negative consequences, from reduced social mobility to lower social trust and even higher homicide rates.
Together, these broad social consequences are linked to misery, political discontent and normlessness.
2. Increasing corruption in politics
Inequality is rising in the U.S. largely because business elites are exercising more influence over policy outcomes, research shows. My related work on privatization explains how 50 years of outsourcing public functions – through contracting, disinvestment and job cuts – threatens democratic accountability.
Research across different countries has repeatedly found that higher income inequality increasespolitical corruption. It does so by undermining trust in government and institutions, and enabling elites to dominate policymaking while weakening public oversight.
Since 2010, weakened campaign finance laws driven by monied interests have sharply increased corruption risks. The Supreme Court ruled then in Citizens United to lift campaign finance restrictions, enabling unlimited political spending. It reached an apex in 2024, when Elon Musk spent $200 million to elect Trump before later installing his Starlink equipment onto Federal Aviation Administration systems in a reported takeover of a $2.4 billion contract with Verizon.
Research shows that a large majority of Americans believe that the economy is rigged, suggesting everyday people sense the link between inequality and corruption.
3. Undermining belief in the common good
National aspirations have emphasized the common good since America’s founding. The Declaration of Independence lists the king’s first offense as undermining the “public good” by subverting the rule of law. The Constitution’s preamble commits the government to promoting the general welfare and shared well-being.
But higher inequality historically means the common good goes overlooked, according to research. Meanwhile, work has become more precarious, less unionized, more segmented and less geographically stable. Artificial intelligence may worsen these trends.
This tends to coincide with a drop in voting and other forms of civic engagement.
The government has fewer mechanisms for protecting community when rising inequality is paired with lower taxes for the wealthy and reduced public resources. My research finds that public sector unions especially bolster civic engagement in this environment.
Given increasing workplace and social isolation, America’s loneliness epidemic is unsurprising, especially for low earners.
All of these factors and their contribution to alienation can foster authoritarian beliefs and individualism. When people become cold and distrustful of one another, the notion of the common good collapses.
Inequality as a policy outcome
News coverage of the Trump bill and policy debate have largely centered on immediate gains and losses. But zoomed out, a clearer picture emerges of the long-term dismantling of foundations that once supported broad economic security. That, in turn, has enabled democratic decline.
As labor’s share of the economy declined, so too did the institutional trust and shared social values that underpin democratic life. Among the many consequences are the political discontent and disillusionment shaping our current moment.
Republicans hold both chambers of Congress through 2026, making significant policy changes unlikely in the short term. Democrats opposed the bill but are out of power. And their coalition is divided between a centrist establishment and an insurgent progressive wing with diverging priorities in addressing inequality.
Yet democratic decline and inequality are not inevitable. If restoring broad prosperity and social stability are the goals, they may require revisiting the New Deal-style policies that produced labor’s peak economic share of 59% of GDP in 1970.
Nathan Meyers, Ph.D. candidate in sociology (September 2025 degree conferral), UMass Amherst
This article is republished from The Conversation under a Creative Commons license. Read the original article.