In this upcoming election cycle, it’s even more important than ever that we elect our representatives wisely to realign our system to enable a functioning economic democracy and viable, organized labor movement. We are on the precipice of creating an economy run by the rich, for the rich.
In other words, the rich will get richer, and the poor will get poorer.
The latest information shows that the top 20% of income earners account for 59%-63% of all consumer spending, a near-record high. The top 10% account for nearly 50% of all consumer spending.
Personal consumption expenditures in the U.S. account for about 70% of the nation’s gross domestic product. Maintaining it is an inseparable part of the well-functioning of our economy and the well-being of households.
This is why, during severe economic downturns or other economic shocks, governments rescue people in need through tax credits, direct payments, and extended unemployment benefits. Doing so maintains living standards and the economy’s functioning. Consumption and how it changes over time — and what proportion of the population drives these changes — have significant economic importance.
When household incomes fall or stagnate while prices rise, as we’re seeing in the current economy, spending declines, and the situation becomes even more dire. There is less of a safety net and less assurance of a dignified life. We have seen this across our economy as a whole, and even more so in California.
We are experiencing a “K-shaped” economy, which illustrates the imbalance between high- and low-income households. Those in the upper-income bracket drive the most consumption, often fueled by gains in stocks and real estate. According to the Wall Street Journal, the highest-earning 10% of Americans have increased their spending far beyond inflation. This leaves low-income Americans, who are a much larger population, at the bottom.
I remember a time in my early research and teaching when economic changes meant attention focused on job opportunities and employment, the cost of living, changes in income, homeownership, and economic indicators that would inspire hope or fear. It was customary to focus on people’s lives, families’ well-being, and improving the lives of the majority.
What changed?
Politically based modifications to our tax system have triggered a tremendous shift in income distribution. The financialization of our economy emboldened high-net-worth individuals and large corporations to avoid paying their share of taxes. Financial markets, institutions, and their motives increasingly dominated economic activity, prioritizing profits from financial transactions over productive investment in goods and services.
The impact was that the stock market became the focus of attention, overshadowing the effect on American families’ lives.
According to the latest Federal Reserve data, 62% of U.S. adults hold stocks, with mutual funds and retirement accounts the most common. However, wealth distribution is skewed:
The top 10% own 87% of stocks; the bottom 50% own just 1%.
Based on my research, I believe fewer than one-quarter of Americans are rich enough to invest directly in stock markets and own their own portfolio.
The more significant implication of this trend is that high-income earners increasingly propel growth in our country.
With this trend continuing, we can say that our economy is not only for those with higher incomes, but it is also fueled by their incomes and expenditures, and is fueling the disenfranchisement of the overwhelming majority.
The reality is that this may be just the beginning of a more troubling trend.
Workers will have more challenges in increasing their income and standard of living.
Few in the mainstream argue that businesses are relying more on AI solely to increase worker productivity. In reality, the future of AI will be used more as a reason for reducing employees’ working hours, holding their wages and hiring, and increasing income inequality. Not to mention that large corporations are campaigning to change our tax structure for their benefit, not their employees’.
In a 2025 McKinsey business survey, nearly all the respondents reported adopting AI technology to help their businesses. So it is hard to ignore the possibility that the use of AI will escalate, that there will be political backlash from such a development and that it will be a threat to the very foundation of a democratic society.
The most viable way to stand against such a development is to stop electing candidates who offer lip service, rather than solutions, and who talk around issues to protect the status quo.
We need to elect those with a clear, active agenda to bring real change.
Real change starts with putting a concrete plan in place that serves hard-working people and creates a much higher level of economic democracy. This way, workers will have a role in making and passing standards that serve the common good in every action taken and every policy pursued.
Jamshid Damooei, Ph.D., is a professor and executive director of the Center for Economics of Social Issues (CESI) at California Lutheran University. For more information on the comprehensive study “California’s Housing Crisis: Roots of the Problem and What Lies Ahead,” visit the Center for Economics of Social Issues webpage: callutheran.edu/centers/cesi.
This article originally appeared on Ventura County Star: Time to elect candidates who prioritize work and worth | Your Turn
Reporting by Jamshid Damooei, Your Turn / Ventura County Star
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