By: Russ Kamp, CEO, Ryan ALM, Inc.

I occasionally receive emails from Glen Eagle Wealth, LLC, which often contain a nugget of information that inspires me to write. Yesterday’s email provided such impetus. You see, Glen Eagle provided startling statistics from a recent Barron’s article in which they shared that the richest 1% of U.S. households now control 31.6% of U.S. wealth, up from 22.9% in 1989. Meanwhile, the middle-class share of wealth fell from 35.7% to 29.6%, and the bottom 50% fell from 3.4% to 2.5%!

Group	1989	Today	Change
Top 1%	22.9%	31.6%	+8.7 pts
Middle class	35.7%	29.6%	−6.1 pts
Bottom 50%	3.4%	2.5%	−0.9 pts

Sure, an economy can survive, and even grow, with wealth concentration at these levels. But can it truly function? Does increasing wealth concentration eventually undermines the mechanisms that sustain broad-based economic growth?

The economic concern is not simply that some people have too much money. The issue is the fact that who owns the wealth affects what happens to the next dollar of wealth. As we know, the U.S. economy is heavily dependent on household consumption (roughly 70% of GDP). As a result, a dollar of additional wealth accruing to a middle- or lower-wealth household is much more likely to translate into additional spending than a dollar accruing to an already wealthy household.

An important 2025 Federal Reserve study quantified the difference related to the impact of an additional $ of wealth on various cohorts. It estimated that growth in wealth held by the top 20% produced about 0.8 cents of additional consumption, while wealth changes among the bottom 80% produced about 7.5 cents per dollar. That is a huge difference.

The Fed concluded that increasing wealth concentration has reduced the economy’s overall propensity to consume which helps explain why there’s been weaker consumer spending since the Great Recession.

Furthermore, the IMF has found an association between greater equality and longer, more durable growth, while also finding little evidence that ordinary levels of redistribution necessarily damage economic growth.

Ownership of the American economy has increasingly migrated upward and ownership matters because capital compounds. Someone who owns a business, stocks, bonds, and/or real estate participates directly in productivity growth, corporate profits and asset-price appreciation. Someone whose economic life consists primarily of wages participates much less directly.

If productivity increases but workers don’t receive a proportional share of those gains through compensation, the gains don’t disappear. They tend to appear elsewhere through corporate profits, returns on capital, and ultimately asset values. As the data reflects, those assets are disproportionately owned by the wealthiest households.

So, you can witness an economy that continues to grow, but the impact on the lower 50% of American wage earners is reflected in:

• Median household wealth grows slowly,
• Housing affordability deteriorates,
• Household debt rises,
• Retirement security weakens, and
• Economic mobility declines

The impact on retirement security is where we at Ryan ALM focus our attention. We believe that DB pension plans are a mechanism for allowing ordinary workers to participate indirectly in capital ownership and its subsequent returns. Stocks, bonds, real estate and other productive assets generate returns that ultimately finance workers’ retirement benefits. Unfortunately, as DB plans disappear and workers increasingly bear retirement risk individually, households that don’t accumulate substantial 401(k)/IRA balances have much less exposure to the compounding of capital.

History suggests an economy can operate this way for quite a while. The more challenging question is whether it can do so indefinitely without eventually producing weaker consumption, greater reliance on debt, reduced economic mobility, political pressure for redistribution, or some combination of all four. As I’ve said many times, asking the average American worker to fund, manage, and then disburse a “retirement” benefit through a DC plan is just silly policy. Bringing back defined benefit pension plans should provide American workers and our economy the economic boost needed longer-term.