America's wealth gap is growing, and Trump's policies are making it bigger
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Shannon PettypieceTue, March 24, 2026 at 9:00 AM UTC
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As of last October, the top 1% held 32% of America’s wealth, up from about 23% in 1990. (Leila Register / NBC News; Getty Images) (Leila Register)
This article is part of “Unaffordable America,” a series examining rising economic inequality in the U.S. and the policies that drive it.
How’s the economy?
Not bad if you’re rich.
Demand for luxury yachts and private jets is surging thanks to last year’s tax law. Sales of $10 million-plus mansions are booming as stocks hit new highs. And the wealthy and powerful will get to enjoy a new ballroom for galas at the White House.
What if you aren’t rich?
The typical American can’t afford the median-priced home. A new car is out of reach for many, with the average monthly payment exceeding $700. Food banks are seeing a growing number of people skipping meals because they can’t afford groceries, and more middle-class Americans are selling their plasma to make ends meet.
The divide between rich and poor in America is the widest it’s been in at least a generation — and growing. The amount of wealth held by the top 1% increased at more than double the rate of the bottom 90% in the first nine months of last year, according to Federal Reserve figures. At the very top, Elon Musk’s fortune is approaching that of legendary 19th-century businessman John D. Rockefeller when looked at as a share of the overall U.S. economy.
A variety of factors have shaped the struggles of everyday Americans and fueled the gains of the wealthy: The pandemic disrupted the housing market, making it harder to afford a home. Stocks have surged, driven by enthusiasm over AI. Manufacturing has waned, hiring has slipped and costs continue to rise.
President Donald Trump’s policies are amplifying these trends. One year into his second term, his administration has cut programs helping lower-income households while advancing policies benefiting the wealthy and corporations. He’s signed legislation to cut food stamps and Medicaid benefits and put new restrictions on low-income housing assistance and student loans. To cope with higher costs from tariffs, he has suggested Americans buy fewer dolls for their children.
Meanwhile, the Trump administration has given billions of dollars in tax cuts to corporations and the wealthy and loosened regulations on banks while easing rules around cryptocurrency, which he’s benefited from personally.
“Donald Trump talks a lot about the working class, his MAGA base is primarily working class, but if you look at the data, the working class is doing very badly in the second Trump administration,” said Robert Reich, a professor emeritus at the University of California, Berkeley, who led the Labor Department during the Clinton administration. “The real growth in the second Trump administration has been in corporate profits and in the wealth of the people at the top.”
Trump has defended his economic record, referring to concerns over affordability as a hoax and blaming weakness in the economy on Democrats. He’s dismissed numerous polls showing increasing economic anxiety, saying in his State of the Union address in February that he has ushered in a “golden age of America.” As evidence, he cited rising 401(k) balances, a drop in mortgage rates and lower gas prices — though gas prices have since spiked after his attacks on Iran disrupted the global flow of oil. The S&P 500, fueled by an AI boom, grew around 13% during the first year of his second term.
Trump’s allies argue that, while it may take time, all Americans will benefit from last summer’s tax cuts, with the average refund rising by around $1,000 this year, according to data cited by the White House. They also say that Trump’s still-evolving tariffs will eventually boost U.S. manufacturing jobs, which declined last year, noting announcements by foreign governments and corporations about plans to invest in the U.S.
A White House official also pointed to signs of improvement, including a lower rate of inflation than in the past several years and wages that are rising faster than inflation.
Some economists, including those who have served in past Republican administrations, have questioned whether those improvements will be enough to offset pressures elsewhere in the economy, including from a slowing job market, which shed 92,000 jobs in February across a broad range of industries.
For “Unaffordable America,” a yearlong series on the causes and effects of rising economic inequality, NBC News asked readers how they were faring and heard from hundreds of people. In interviews and written responses, many described struggling to find a job and afford higher food prices and health care costs, while others said they were benefiting from gains in the stock market and lower interest rates.
In Miami, a man in financial services wrote that his business was growing. “We had the best year ever,” he said. In Iowa, a woman who lost her job at the end of last year wrote that she was struggling to find a new one. “The unemployment in the state of Iowa is barely paying my bills as a mom of two,” she said.
What’s clear is that the divide between the wealthiest Americans and everyone else has been growing for decades — and shows no sign of slowing. The ramifications of Trump’s policies widening this divide could go beyond Americans’ bank accounts, shaping the political landscape ahead of November’s midterm elections, with multiple polls showing a growing number of voters disapproving of Trump’s handling of the economy.
For many people, these trends are shaking a core belief: that it is possible to get ahead in America.
A widening gap
When asked, “Are you better off than your parents?” the answer for many Americans used to be a resounding “yes.” Now, the answer is more often unclear.
Americans born in the 1980s were less likely to earn more than their parents, compared with those born in the 1940s, a 2016 study by Stanford University economists found. Today’s households are also facing higher costs, including spiking health care premiums and deductibles, as well as child care expenses.
These struggles are not equally felt. As of last October, the top 1% held 32% of America’s wealth, up from about 23% in 1990. The wealth held by white households far outstrips that of Black and Hispanic households.
Slowing wage gains have contributed to the widening gap between rich and poor. Since 1979, wages for the bottom 90% of earners have increased 44%, while wages for the top 1% of earners have risen more than 180%, a 2024 report from the Economic Policy Institute found.
That’s left many Americans feeling like they are falling behind.
Reid Pinkham, a senior applied scientist working on AI-related projects, is among those doing well. After losing his job at Meta, where his income more than quadrupled over four years, he said he quickly got another job at Amazon for higher pay. The value of his Meta stock options and other investments has climbed.
Now, at 30, Pinkham owns a home in the Seattle area and is planning to build an expensive addition. When he and his wife think about having kids, he said child care costs aren’t a major concern, and if he were to lose his job, he’d have enough savings to get by for years.
But he still has a negative view of the economy, based on what he’s hearing from friends and family.
“There are a lot of people whose incomes don’t go up when the stock market goes up,” said Pinkham, who votes for Democrats. “For me personally, I’m doing fine. But then you look at the macro numbers, and I don’t think it’s in a good place.”
The Trump administration’s regulatory cuts, along with tax breaks for corporations in last year’s tax law, sent stocks to record highs last year. Those heavily invested in technology companies are gaining the most — just seven tech companies, including Amazon and Meta, were responsible for 40% of the gains last year in the S&P 500.
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While most Americans have some investment in the stock market, a disproportionate share of gains have gone to the wealthy, with the richest 10% of households owning around 90% of all stocks, according to Federal Reserve data.
Those same households were responsible for around half of all consumer spending in 2025, the highest rate since at least 1989, according to Moody’s Analytics. Wealthy households also buoyed the housing market and new car sales over the past year. Walmart said last month that most of its growth was coming from households making more than $100,000.
Jeremy Kregar, 23, considers himself lucky among his group of college friends. He’s making $21 an hour working for an optometrist in Portland, Oregon, where he has relatively affordable rent of $1,000 a month.
But his paycheck barely covers his bills, including payments on his $20,000 student loan. Some days, he said he’s skipped meals because he can’t afford groceries and earns too much to qualify for food stamps. The idea of owning a home, saving for retirement or building an emergency savings fund seems hopeless, he said.
“Based on my lived reality, and that of my friends, it doesn’t seem like anyone’s doing better. It seems like everyone’s actually doing worse,” Kregar said. “It feels like we’re being gaslit by the government.”
Among the ways Trump has affected Americans’ bottom line is through his tariffs, which have driven up retail prices, said Doug Holtz-Eakin, president of the American Action Forum, who worked in the George W. Bush administration. Higher prices disproportionately affect those with less disposable income to absorb price hikes.
The tariffs “are hurting the bottom end much more than the upper end,” Holtz-Eakin said. “And they have been responsible for a lot of headwinds to the labor market.”
The slowing job market is putting significant pressure on households. Wages aren’t rising as quickly as in recent years, and employers have pulled back on hiring. The U.S. added just 584,000 jobs in 2025, the worst year for hiring since Covid. And most of the growth was driven by a handful of industries, like health care and education.
Economists have blamed this on factors including higher costs and uncertainty from tariffs, overhiring by companies after the pandemic, and the increasing use of robotics and AI.
“We’ve seen essentially no job growth. If you look outside of health and education, we lost jobs in 2025,” Holtz-Eakin said. “It’s not a strong labor market. People are not getting hired.”
Measuring Trump’s moves
The economy was once Trump’s strongest selling point: He centered his 2016 campaign on a fight for working-class voters. Once he was in office, wage growth accelerated for the lowest-paid workers and unemployment fell to the lowest level in decades, prior to the disruptions caused by the pandemic.
But in his second term, Trump’s approval rating on the economy has been slipping.
A White House official said the administration aims to follow a similar playbook to Trump’s first term: using tax cuts and regulatory changes to spur investment, along with a crackdown on immigration, which the administration believes will tighten the labor market and drive up wages.
“Much work remains, but this is just the beginning,” White House spokesman Kush Desai said in an email, adding, “Americans can rest assured that the best is yet to come.”
Trump has proposed some programs designed to help lower households’ costs, such as a cap on credit card interest payments and a 50-year mortgage that would reduce monthly payments. Many of the proposals haven’t been enacted.
Other moves, like price cuts on a limited number of prescription drugs, will benefit some people — but could be offset by higher health insurance costs after Congress failed to extend Affordable Care Act subsidies.
Some programs will take years to have an effect, like Trump-branded savings accounts for young children. The federal government will deposit $1,000 into the accounts, which will be invested in the stock market and converted to retirement accounts when children turn 18. Assuming the stock market continues growing at about 10% a year, that $1,000 would become about $5,500 in 18 years. The amount could grow substantially more if families are able to make the maximum contribution of $5,000 a year, which benefits wealthier households.
Trump’s most direct impact on Americans’ finances may come as they file their taxes; many households will see a bigger refund thanks to Trump’s “big, beautiful bill” signed into law last summer. Middle-income households may benefit from a reduction in taxes on overtime pay, and some older adults will get a tax break on their Social Security income.
But the biggest gains in new tax cuts will go to wealthier households, including those who own businesses or expensive homes in states with high property taxes and those who receive multimillion-dollar inheritances. The law also extends tax cuts made during Trump’s first term that were set to expire.
“There are things in the bill like no tax on tips, but they are much, much smaller” compared with interventions that help the wealthy, like the estate tax, said Owen Zidar, an economics professor at Princeton University.
He pointed to an analysis by the Tax Policy Center that found households making $460,000 to $1.1 million would get an average tax cut of $21,000 in 2026. Meanwhile, middle-income households making $67,000 to $119,000 would get an average tax cut of about $1,800.
Those breaks come on top of decades of tax cuts, like those for business owners enacted during Trump’s first term, that have benefited the richest households and enabled them to continue amassing more wealth, Zidar said.
Meanwhile, those like Liz Doyle in Oklahoma have continued to struggle to afford the basics.
Doyle, 67, who voted for Trump, said rising prices for everything from coffee to insulin are straining her monthly budget, nearly all of which comes from Social Security.
“The grocery prices are absolutely freaking ridiculous,” Doyle said. “Coffee prices, what in the world?”
Her property taxes have quadrupled over the past two years, she said. She doesn’t have a 401(k) and only owns a small amount of stocks, so she hasn’t benefited much from the market’s surge. Occasionally, she sells some vegetables, like okra, from her garden at the local farmers market for extra income.
“President Trump has done so much better than Biden,” said Doyle, who cited the lower rate of inflation under Trump. “But the question is: Is Trump that good, or was Biden that bad?”
Kregar, who voted for former Vice President Kamala Harris in the 2024 presidential election, said his experience in the economy since graduating from college that year has shifted his views further toward Democrats.
“Every time I go to the grocery store, I’m filled with dread,” Kregar said. “Meanwhile, we’re going to build a White House ballroom? It feels like, as an American, a slap in the face.”
Source: “AOL Money”
