r/Plutonomy

The Federal Reserve's latest Survey of Consumer Finances reveals a striking divergence between income growth and wealth accumulation from 2022 to 2025.

Annualized growth in median net worth and income (inflation-adjusted):

Income percentile	Net worth	Income
Bottom 20%	−2.0%	+1.3%
20th–39th	−0.3%	+1.0%
40th–59th	+2.6%	+2.3%
60th–79th	+2.6%	+0.7%
80th–89th	0.0%	−1.0%
Top 10%	+9.4%	−2.0%
All families	+0.7%	+2.3%

The median net worth of families in the top income decile reached $3.67 million (from $2.80M in 2022), compared with $815,000 (from $818k in 2022) for the next-highest decile and $215,900 across all families.

Here's the remarkable part: Families in the top income decile saw their real median income decline approximately 2.0% annually, while their median net worth increased 9.4% annually.

Meanwhile, across all families, median income increased 2.3% annually, but median wealth grew just 0.7%.

The plutonomy angle: Income and wealth are increasingly telling different stories. Higher earnings do not necessarily translate into faster wealth accumulation, while ownership of appreciating assets can strengthen household balance sheets even when measured income declines.

The data suggest that we have become an economy where owning capital matters more than earning a high income.

McKinsey’s Workforce in Motion report argues that the U.S. labor market can create plenty of new jobs while still producing major disruption.

Exhibit 16 shows why. Millions of workers are projected to leave declining occupations such as office/admin support (4.8M), retail/sales (2.3M), and transportation/logistics (1.4M). Growth is concentrated elsewhere: healthcare, construction, management, technology and other fields.

But the pathways between them vary enormously. Many workers face “winding” or “unpaved” transitions requiring new skills, credentials, relocation, or accepting a different kind of job.

That is the Plutonomy angle: capital can reallocate quickly, but labor cannot.

AI may increase productivity and create new opportunities, while the cost of getting from the old economy to the new one falls disproportionately on workers.

According to the Financial Times, HSBC is planning to eliminate up to 70% of its financial adviser positions and approximately half of its management and specialist roles in its UK wealth management business as it expands its use of AI. The proposed reductions remain subject to consultation.

This is a big shift for a profession that has traditionally been high-income and knowledge-intensive. Now, AI is letting institutions serve the same number of clients (or more) with a fraction of the staff.

The plutonomy angle is labor-capital substitution. When a company can make the same revenue with way fewer workers, that money stops going to employee salaries and shifts directly to shareholders and tech owners.

The heatmap, from the 2025 NBER working paper, Artificial Intelligence and the Labor Market, illustrates how AI exposure is particularly pronounced in management, business and financial operations, and computer-related occupations, suggesting that AI's impact may extend well beyond routine administrative work into highly skilled, knowledge-intensive professions.

FRED shows how much net worth it took to enter the top wealth tiers.

From 1989 to 2022 (last year available in FRED):

• Top 10% cutoff: $487k → $2.1M, about 4.5% CAGR
• Top 1% cutoff: $2.3M → $11.0M, about 4.9% CAGR
• Typical hourly wages grew closer to 3.3% annually

But the CAGR comparison understates the dynamic.

The top wealth tiers started with a much larger asset base. A higher return applied to millions of dollars compounds into enormous absolute gains. The top 1% threshold increased by roughly $8.7 million over the period.

And there is another asymmetry: wages are mostly consumed, while wealth is largely allowed to keep compounding.

That is the plutonomy mechanism: Large asset base × higher compounding rate × higher reinvestment rate × decades = rapidly widening balance-sheet power.

Wages can rise every year, but wealth compounds on wealth. Wage earners are trying to catch a train that already left the station and the train is moving faster than they can run.

The ladder isn't just rising faster. The people already near the top are standing on a much larger compounding base.

The U.S. added just 29,000 jobs in September, well below expectations, and revisions erased another 60,000 jobs from July and August.

Unemployment rose unexpectedly to 4.2%, while annual wage growth slowed to 3.0%, the weakest since 2021.

Markets loved it.

The S&P 500 rose +0.7% and the Nasdaq 100 hit an all-time high as traders cut the odds of another Fed rate hike this year.

The Plutonomy angle

This is the labor economy and the asset economy moving in opposite directions.

Weak hiring and softer wages hurt workers, but they can help asset owners if they reduce expected interest rates and support valuations.

And if companies can keep growing profits while adding fewer workers, the divergence gets even wider. A weak labor market and a strong stock market are no longer contradictory.

NYC AI companies leased 2.2M+ square feet of office space in the first half of 2026, and NYC AI startups raised a record $16.7B last year.

But entry-level hiring is moving the other way.

Since 2022:

• Design/media/writing -41%
• Customer support -34%
• Administrative -31%
• Business management -27%
• Finance -23%

Meanwhile, entry-level postings requiring AI skills rose 55%.

This chart from the Partnership for New York City shows where AI is already hitting hardest: jobs with both high AI exposure and high actual adoption.

So the risk is not just “AI takes jobs.”

It is that AI removes the junior work that used to train people for senior work. The report explicitly warns that future workers may need entry-level skills without first getting the entry-level job that traditionally built them.

That is a very NYC version of the K-shaped economy:

• AI investment up.
• Office leasing up.
• Skill requirements up.
• Entry-level opportunity down.

The boom is real. So is the narrowing path into it.