America has two labor markets now
axios.com
axios.com
- The tiny ultra rich who've never had it better and don't see a problem.
- The very rich who are also doing really well.
- The moderately rich are okay too.
- An ever-shrinking middle class who either own or have a mortgage on 1 home.
- The masses of people living paycheck-to-paycheck without savings without a path to property ownership or raising a family.
- Undocumented, unskilled, and UberEats workers living in their cars and can't afford the basics of life to keep going.
There is some visibility up and down 1 strata, but very little beyond that.
1. The Tiny Ultra Rich (Top 0.1%)
~0.1% of the population
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2. The Very Rich (Top 1% excluding above)
~0.9% of the population
* the top 1% control about 35% of the total wealth
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3. The Moderately Rich (Top 10%, excluding above)
~9% of the population
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4. Shrinking Middle Class (Homeowners with Mortgage, Some Stability)
~25–30% of the population
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5. The Paycheck-to-Paycheck Majority (Working but Financially Precarious)
~40–45% of the population
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6. The Invisible Class (Undocumented, Unhoused, or Living in Vehicles)
~10–15% of the population
In 1900, you might have seen a similar stratification. For example:
Below is a historically grounded approximate breakdown of the adult population by economic stratum in 1900:
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1. Capitalist Elite / Plutocratic Class
~1% of the population
• Industrial tycoons, major landowners, top financiers.
• Controlled a disproportionate share of national wealth (upward of 25–40% in the U.S.).
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2. Upper Middle Class / Bourgeois Professional Class
~5–7% of the population
• High-status professionals, corporate managers, senior civil servants.
• Educated, well-connected, often urban.
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3. Lower Middle Class / Petty Bourgeoisie
~10–15% of the population
• Shopkeepers, skilled tradespeople, clerks, schoolteachers.
• Often lived modest but stable lives; economically vulnerable to downturns.
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4. Urban Working Class (Skilled and Semi-skilled)
~25–30% of the population
• Industrial workers in factories, transportation, and infrastructure.
• Many joined trade unions; others lived paycheck to paycheck in cities.
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5. Rural Laboring Class / Tenant Farmers
~30–40% of the population
• Agricultural workers, sharecroppers, farm tenants.
• Still a dominant population in 1900, especially outside major cities.
•In the U.S., this included a large population of Black agricultural laborers in the South.
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6. Underclass / Casual Labor / Destitute
~10–15% of the population
• Unemployed, chronically poor, recent immigrants in slums, itinerant laborers.
• Often invisible or ignored in public discourse except as objects of reform or charity.
If you’re in business, look for opportunities where others inaction can benefit you. Maybe that’s quality talent available in the labor market.
It may be the same kind of stagnation people faced under the gold standard; all the gold and assets had made their way into the hands of a select few people and so the appetite for risk dropped along with number of new opportunities and class mobility. Fiat money creation allowed elasticity of the money supply and thus the creation of new opportunities outside of the existing power structure. People started being empowered to make funding decisions using "Other people's money" and this facilitated investment and risk taking.
Now the issue is that the money flows themselves have been monopolized. It's still largely "Other people's money" being created and invested, but the anti-competitive dynamics are very strong. People aren't thinking about just numbers anymore (as they did with gold), they are concerned about 'rates of change' in money flows. I think that's what's driving the urge to control money flows and prevent risky spending and prevent competition. It's all about growth numbers and monopolizing growth itself.
This might explain why tech companies are laying off staff whilst having record profits and stock prices. It's about maintaining a leading position in a race, not about satisfying anybody's needs. It has become a zero-sum game about who can take control of existing money flows 'more efficiently'; meaning with less risk and less effort than anyone else. Unfortunately, the winning 'shortest path' to getting money does not align with risk-taking or value-creation.
The real economy is not a zero sum game (and never was), if you find a way to make a widget cheaper then everyone benefits from cheaper widgets and you get paid for it. The other widget manufacturers might lose, but you can create a net positive effect.
Also, it's possible that your product could be cheaper to produce than your biggest competitor, but you won't know for sure until you reach the same scale as them; which you may never reach due, again, to the massive hurdles you have to clear to get started.
The software sector is full of high quality software which nobody uses and low quality software which everyone uses. There are software companies worth billions of dollars which produce software which all users nag about constantly. Sometimes software which people have to use daily, many hours per day. They hate it, they all agree they hate it, but they have to use it anyway because the boss says so and the boss doesn't need to use it.
Don't even get me started on the hurdle of regulations/compliance. The idea that the most efficient solution wins is a myth. Mostly, they lose and they don't just lose a bit, they literally lose completely and get NOTHING, not even recognition of their work.
Our society is full of highly skilled, capable, ambitious people who are totally broke. It's relatively feasible to get a corporate job paying a high salary contributing basically nothing of value... But try to do the BEST WORK of your life working for yourself and there's a very high chance you will get precisely $0 after your 5th startup.
The insight that most wealth is created by trade was one of my most mind blowing experiences!
A lot of economic activities are rewarded simply by virtue of the fact that they found a short path of low-resistance from a public money printer to somebody's bank account. There are many government money printers around the world which can be tapped into. Normal value-creating businesses can't compete with such schemes.
Just look at Bitcoin as an example; it uses the same amount of electricity as the nation of Argentina to process a measly 4 transactions per second max (even though there are countless alternatives which are way faster, just as secure and less harmful to the environment). It's worth a lot of money, not worth a lot of value.
Helping corrupt dictators to move around their money globally with impunity while baking the planet, does not add value to society; it destroys value.
Simple example: I have a Shmoo that's worth $40 to me and $70 to you. You buy it for $50. I'm now $10 wealthier, and you are $20 wealthier.
Ah, but the original widget manufacturer bought a Senator, and so now there are onerous widget regulations that specifically target me while leaving them unscathed.
Don't you know widgets could somehow be dangerous in the hands of.. uh.. the Chinese?
> The real economy
It's possible it stopped existing decades ago. To quote the character of Dr Burry: "It's possible that we are in a completely fraudulent system."
> It's possible it stopped existing decades ago.
This is one of those things that sounds profound, but if you actually think about it, is obviously bullshit.
Of course there's a real economy. By definition, any time you have a bunch of people buying and selling things to earn a living—and we've got over 300 million of them doing just that in the US—you have a real economy.
That doesn't mean it's the same as the economy that's being paid attention to by the media or the government, but the idea that "the real economy stopped existing," let alone "decades ago", is....well, it's not even wrong. It's a complete category error.
The only way you can possibly assert that in the face of obvious reality is to start redefining terms until they are effectively meaningless.
The entire reason that basically the entire world switched away from the gold standard just about the second the US proved it was logistically practical was that specie-backed currency had no long-term stability at all.