Has there been a $50 trillion wealth transfer to the richest Americans?

Summary

Podcast Summary: "Has there been a $50 trillion wealth transfer to the richest Americans?"

Podcast: More or Less
Host: Tim Harford, BBC Radio 4
Guest: Carter Price, RAND Corporation
Date: November 15, 2025

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Overview

This episode investigates the widely-circulated claim that, since 1975, between $50 to $80 trillion has been "transferred" from the bottom 90% to the wealthiest 1% of Americans. Tim Harford and guest Carter Price, a senior mathematician at RAND and author of key studies behind these figures, unpack the origins, methodology, and meaning behind these eye-catching statistics often cited in political debates, including by Senator Bernie Sanders.

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Key Discussion Points & Insights

1. Origin and Popularity of the Claim

• The claim has gained public traction, spearheaded by Senator Bernie Sanders and is based on reports authored by Carter Price at RAND.

  • Reference:

    "The claim appears to have been popularized by left wing Vermont Senator Bernie Sanders." (Tim Harford, 01:47)

  • Sanders uses a $50 trillion figure; other sources cite $80 trillion.

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2. How the Figures Were Calculated

a. Comparing Pay Growth to Economic Growth (02:12 - 04:36)

• The analysis tracks how the incomes of the bottom 90% would have grown if, after WWII and up to the mid-1970s, all workers' pay had kept rising in line with the overall economy—mirroring earlier patterns of broad-based wage growth.

  • Quote:

    "There was a time, perhaps an unusual time, when this relationship was very stable…people’s wages went up with the economy, more or less across the board." (Tim Harford, 02:41)

  • In the mid-1970s, this pattern broke:

    "Beginning in the mid-70s, the top of the income distribution started to pull away and that expanded over time..." (Carter Price, 03:33)

• Carter Price calculated the annual difference between actual income and hypothetical income if that equitable trend continued, summing the gaps across years to reach figures of $50 trillion (up to 2018) and $80 trillion (up to 2023).

  • Quote:

    "We did that for each year…then we added it all up to get the $50 trillion or the $80 trillion." (Carter Price, 04:15)

b. Interpreting the Numbers (04:36 - 05:34)

• These sums do not represent literal transfers or direct redistribution, but rather “foregone income”—what the bottom 90% would have earned under the older trend.

  • Quote:

    "This is the total income that everybody in the bottom 90%…would have made if the economy grew evenly as it used to." (Tim Harford, 04:36)

• The current gap is $3.5–$4 trillion annually, or about $30,000 per full-time worker.

  • Quote:

    "In 2018, it was about 2, 2.5 trillion was that gap…since then that gap has grown to more than 3.5, almost $4 trillion each year." (Carter Price, 05:16)

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3. What Do These Numbers Mean?

a. Visualizing Inequality, Not Determining Causes (05:34 - 07:01)

• The claim powerfully illustrates the magnitude of rising inequality but does not explain its causes, nor does it argue for a specific policy fix or suggest the counterfactual was possible.
  • Quote:

    "It’s certainly a fresh way of visualizing the magnitude of the increase in inequality. What it doesn’t tell us is what caused the increase, nor whether we could actually have tweaked some policy..." (Tim Harford, 05:34)

b. The Productivity-Wage Debate (07:22 - 08:12)

• Sanders’ narrative: Productivity rose, but only elites captured these gains.
  • RAND's data supports this in part: Most workers’ pay stopped matching productivity increases, while executives' compensation soared.
  • Quote:

    "You did not see most workers pay growing with the rate of productivity, but the top…saw their wages growing much faster." (Carter Price, 07:51)

c. The Role of Taxes and Policy (08:12 - 08:47)

• The findings are based on pre-tax, pre-transfer incomes and do not account for the impact of changing tax policies.
  • Top marginal tax rates fell from 70% in 1975 to 37% in 2023.
  • Quote:

    "In 1975, the top rate of income tax in the US was 70%. In 2023 it was 37%." (Tim Harford, 08:47)

  • Carter Price observes these changes “in some sense…exacerbated that change.” (08:41)

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4. Is It Really a 'Wealth Transfer'? (08:47 - 09:47)

• Crucial Clarification: Despite frequent use of terms like “wealth transfer,” the research measures income, not wealth, and does not track actual assets.
  • Quote:

    "That’s certainly not the language I use…It’s not wealth. It's income in some sense..." (Carter Price, 09:19)

  • Over decades, cumulative changes in income would relate to wealth, but directly calling this a wealth transfer is misleading.

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Notable Quotes & Memorable Moments

• On the extraordinary scale of the gap:

  "You sum something up over 50 years. Half these people are dead and the other half have been born. I mean, it’s such a long period of time, but $4 trillion a year I can get my head around." (Tim Harford, 05:34)

• On the purpose of the numbers:

  "It’s a fresh way of visualizing...but it doesn’t tell us what caused the increase." (Tim Harford, 05:34)

• On the use of ‘wealth transfer’ language:

  "That’s certainly not the language I use...It’s income...correlated with wealth, but it is not wealth." (Carter Price, 09:19)

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Timestamps for Key Segments

• [01:27] – Introduction of the '$80 trillion transfer' claim
• [02:12] – Carter Price explains report methodology
• [03:33] – Income growth divergence post-1970s
• [04:15] – Summing up the gaps to reach trillions
• [05:16] – Annual shortfall of income for the bottom 90%
• [07:22] – Productivity v. wages
• [08:47] – Tax system impact and change from income to “wealth” language
• [09:19] – Carter’s clarification on terminology

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Tone and Style

The episode is analytical but accessible, with Tim Harford’s characteristic blend of curiosity, skepticism, and relatable metaphors. Carter Price’s input is precise yet clear, focusing on methodology and avoiding politicization of the findings.

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Takeaway

The oft-cited "$50 trillion transfer" refers not to literal redistribution but to massive, compounding differences in income growth for the bottom 90% versus the top 1% since the 1970s—a compelling visualization of increasing inequality, but one that needs careful interpretation, especially regarding its causes and the use of terms like "wealth transfer."

Transcript

[Tim Harford]

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[Tim Harford]

Hello and thanks for downloading the More or Less Podcast. We're the programme that looks at the numbers in the news and life and the 1970s. I'm Tim Harford. Loyal listener Milena Kopkowska got in touch to ask us to look into a claim to do with income and wealth inequality.

[Podcast Announcer / Asma Khalid]

Since 1975, $80 trillion has shifted from the bottom 90% to the top 1%. In 2023 alone it was $3.9 trillion. That's enough to give every full time worker in the 90% an extra $32,000 a year.

[Tim Harford]

The claim appears to have been popularized by left wing Vermont Senator Bernie Sanders. And although he uses a slightly different.

[Carter Price]

Figure, there has been a $50 trillion transfer of wealth from the bottom 90% to the top 1%.

[Tim Harford]

Are these numbers right and what do they mean?

[Carter Price]

My name is Carter Price. I am a senior mathematician at the Rand Corporation.

[Tim Harford]

Carter knows all about these trillions of dollars. He's the author of the two reports that are Lister Melena and Bernie San are talking about. So how were these numbers worked out? Step one we took the economic growth.

[Carter Price]

Rate and looked at the actual growth in pay for the bottom 90% of workers.

[Tim Harford]

This claim is about income and Carter started by looking at the relationship between the incomes of the bottom 90% of workers and the economy more generally. Now, there was a time, perhaps an unusual time, when this relationship was very.

[Carter Price]

Stable from after shortly after the Second World War up to the mid-70s. If the economy grew 5%, people's wages went up 5%. If the economy grew 2%, people's wages went up 2%. More or less across the board. We saw very even growth for that 25ish year period.

[Tim Harford]

So there was an inequality, but the inequality was consistent. It wasn't growing or shrinking over time, correct?

[Carter Price]

Yeah, it was more or less the.

[Tim Harford]

Economy grew evenly that even income growth is certainly not the rule. And it did not continue forever.

[Carter Price]

Beginning in the mid-70s, the top of the income distribution started to pull away and that expanded over time. So that in particular the top 1%, the top 0.1% and sort of the higher up the income distribution you grow, the faster their incomes grew. And that has more or less persisted in the 50 years since 1975.

[Tim Harford]

Carter wanted to work out what would have happened if this post war era of even growth in incomes had continued into the 80s, 90s, noughties, 80s and so on. So step two, he did some maths again looking at the bottom 90% of.

[Carter Price]

Worker incomes instead of what their pay actually grew at. Had it grown at the rate of the broader economy, what would have happened? And so we did that for each year that told us what that gap would have been for that given year. And then we added it all up to get the 50 trillion or the 80 trillion.

[Tim Harford]

These two figures are just numbers from two different papers. The first calculated the difference with this alternative universe up until 2018. The second moved it a few years on to 2023. And so the 50 trillion, which is the older figure, the more recent figure of 80 trillion, this is basically, if I understand it, this is foregone income. This is the total income that everybody in the bottom 90%, the extra income they would have made if the economy grew evenly as it used to. But they didn't because it grew unevenly and more money went to the top 10%.

[Carter Price]

Correct? Yeah, we're summing up each year. So in 2018 it was about 2, 2.5 trillion was that gap. And since then that gap has grown to more than 3.5, almost $4 trillion each year.

[Tim Harford]

That's a number that makes more sense to me because you sum something up over 50 years. Half these people are dead and the other half have been born. I mean, it's such a long period of time, but $4 trillion a year I can get my head around. This works out at something like $30,000 per full time employee in the US which does look on the like a big number. So what does it tell us? It's certainly a fresh way of visualizing the magnitude of the increase in inequality. What it doesn't tell us is what caused the increase, nor whether we could actually have tweaked some policy to land us in this counterfactual world where we get all of the extra growth but none of the extra inequality. Perhaps pay at the top increased dramatically because American entrepreneurs started companies that brought in huge wealth to The US Perhaps without them, everyone would have earned less and been poorer. Or perhaps if growth had been more inclusive, it would have been even higher. That's not a question that Carter's research seeks to answer. Just so I'm clear. You're not. This is not to do with a change in growth rate or anything like that. You're purely trying to track the change in inequality, correct?

[Carter Price]

Yes. And so the growth rate did decline during this time period. So in those early years the economy was growing much faster. And then sort of the stagflation period of the 70s and then we entered a period of much slower growth following that.

[Tim Harford]

Now, Bernie Sanders has an explanation for why inequality has gone up. And his story is workers became more productive, but that the people who own the companies basically took all the benefits of that productivity. They added it to their own pay packets or their share packages, and they didn't pay the workers in line with increasing productivity. What do the data tell us about that story?

[Carter Price]

I think that lines up with the facts that you did not see most workers pay growing with the rate of productivity, but the top, the highest earners, many of them would be corporate executives, saw their wages growing much faster.

[Tim Harford]

Your data is all pre tax, pre transfers. So obviously after that the government kind of gets involved and moves money around and taxes some people and gives money to other people. Do we have any idea what difference that makes and whether the tax system has changed to kind of to offset the trend that you describe? Or maybe it's changed to exacerbate the trend that you describe.

[Carter Price]

In some sense it has exacerbated that change.

[Tim Harford]

In 1975, the top rate of income tax in the US was 70%. In 2023 it was 37%. But that does raise a question because when Senator Bernie Sanders used this number, he talked about a transfer of wealth. But Carter's analysis is looking at incomes over time and not wealth. And it doesn't include data about taxes at all. That sort of language like wealth transfers and so on. Is that the language you would use or would you have a different form of word?

[Carter Price]

That's certainly not the language I use. It's not wealth. It's income in some sense. Because when we look at the cumulative effect of this, it is like wealth because it's income over time. Obviously a portion of that you spend, some of it you save. So it would be correlated with wealth, but it is not wealth. And so that's not the, maybe not.

[Tim Harford]

The best way to describe this, thanks to Carter Price. And that's it for this episode of More or Less. If you've seen a number you want us to take a look at, email us at More or lessbc Code until next time. Goodbye.

[Podcast Announcer / Asma Khalid]

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[Tim Harford]

But what's happening in America isn't just the cause of global upheaval. It's also a symptom of disruption that's happening everywhere.

[Podcast Announcer / Asma Khalid]

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[Tim Harford]

Tristan Redman in London, and this is the Global Story.

[Podcast Announcer / Asma Khalid]

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[Tim Harford]

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