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  5. Wealth, Wages, and Power
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Wealth, Wages, and Power

Paper Session

Monday, Jan. 5, 2026 1:00 PM - 3:00 PM (EST)

Philadelphia Convention Center, 301
Hosted By: Union for Radical Political Economics
  • Chair: Izaura Solipa, Brown University

Real Wages are Not Real: Reassessing CPI-Deflated Wages as a Measure of Living Standards

Evan Wasner
,
University of Massachusetts-Amherst

Abstract

Deflating aggregate income measures such as hourly wages by the CPI is commonly used
to estimate real purchasing power for the average consumer and, by extension, living
standards. Yet, even when accounting for income inequality, changes in real wages show
little correlation with alternative indicators of economic well-being in the U.S., such as food
insecurity, housing instability, or consumer debt defaults. I argue this is because CPIdeflated aggregate wages are conceptually misleading, as the exercise of aggregation
obscures information on the relationship between incomes and costs of living on the level
of the individual. I demonstrate this empirically using microdata from the Consumer
Expenditures Survey and a large retail scanner dataset that tracks household-level
consumer purchases. Accounting for the wide dispersion in the experiences of
households, I show that, contrary to standard real wage data, various components of living
costs have risen faster than incomes since 1994 as well as during the COVID-19 inflation. I
propose a more comprehensive measurement of real incomes that correlates more closely
with alternative indicators of economic well-being.

The American Economic Elite: Pathways to Power

Izaura Solipa
,
Brown University
Kevin Young
,
University of Massachusetts-Amherst
Sean McQuade
,
Northwestern University
Jorge Quesada Velazsco
,
St Gallen University
Shay O'Brien
,
Harvard University

Abstract

Economic elites are key actors in shaping political and economic outcomes that preserve wealth and ensure elite reproduction. This paper investigates the structural pathways that enable individuals to ascend to, and remain within, the uppermost tiers of wealth and power. Drawing on the World Elite Database (WED), which includes approximately 1,500 individuals in the United States for the year of 2020, the study maps the mechanisms that confer and sustain elite status. It emphasizes the role of inherited advantages—such as parental wealth and social status – in shaping life opportunities from the onset. These advantages are further consolidated through access to prestigious educational institutions and elite career trajectories, which function as both gatekeeping mechanisms and conduits into powerful networks. By tracing the family backgrounds, educational credentials, and career paths of the contemporary U.S. economic elite, the paper uncovers the social and institutional networks that undergird the concentration and reproduction of this ruling class.

Cementing the Plutocracy Using Stealth Tax Policy

Robert B. Williams
,
Guilford College

Abstract

The expansion of household wealth along with its unprecedented concentration among relatively few hands has garnered much attention recently. Since 1989, household wealth has increased from $17 to over $139 trillion, enough if equally shared to make every American household a millionaire. Most of this bounty, almost 86 percent, has redounded to the wealthiest quintile of American households. Perhaps worse than the Gilded Age, wealth disparities are defining American society and cementing a system of economic stratification.

This paper examines a largely ignored cause – federal income tax policies. Specifically, I examine a dozen federal tax expenditures. Designed as stealth entitlements, most provide generous assistance without limit or much notice. Devised to assist households accumulate wealth, each targets households who’ve already amassed personal wealth. Since 1989, their annual assistance has increased from $192 billion to $1.2 billion in 2023.

Combining the Joint Committee on Taxation estimates on federal tax expenditures with the triennial Survey for Consumer Finances, this paper documents which households benefit from this federal largesse. For example, 95 percent of the reported capital gains in 2022 were realized by wealthiest quintile. Including all twelve tax expenditures, this group captured 78 percent of the offered tax benefits.
Finally, this paper estimates how much of the increased wealth can be traced to these past benefits. Assuming they yield a 3 percent real, 5 percent real, or S&P 500 indexed return over time, these benefits can explain from 29 to 42 percent of the increase in wealth of the top quintile.
JEL Classifications
  • D3 - Distribution
  • B5 - Current Heterodox Approaches