Robert Reich Warns Most Americans Are Getting Poorer Despite Stock Market Highs

Former Labor Secretary Robert Reich has criticized Treasury Secretary Scott Bessent over claims about U.S. economic inequality, calling the administration’s denial of a "K-shaped economy" misleading. Reich, a professor emeritus at the University of California, Berkeley, argued in a recent post that while corporate profits and stock markets surge, most Americans face stagnant wages and rising costs, leaving them financially worse off.

The dispute began after Reich highlighted data showing fast-food chains like McDonald’s seeing fewer visits from lower- and middle-income customers in early 2025 due to affordability concerns. McDonald’s CEO Chris Kempczinski described a "two-tier economy," where upper-income consumers fare better than the rest. Reich countered Bessent’s public dismissal by stating that wage growth has not kept pace with inflation, meaning real purchasing power is declining for most households.

In an interview on Democracy Now!, Reich called Bessent’s response—including a suggestion that Berkeley fire him—unprofessional and emblematic of an administration prioritizing aggressive rhetoric over economic reality. Reich emphasized that stock market performance, often cited by the administration as an economic success, disproportionately benefits the wealthiest Americans. He cited Federal Reserve data showing the top 1% owns over half of all stocks, while the top 10% control 92%.

Reich also linked rising living costs to administration policies such as tariffs and military spending. He argued that tariffs on imports like Canadian lumber have increased housing costs, while sustained military operations in the Middle East divert billions in public funds. He warned that these policies deepen inequality by shifting economic burdens onto working families while enriching corporations and investors.

Throughout the interview, Reich warned that continued denial of economic disparity risks further eroding public trust and economic stability. He stressed that real economic health must be measured by the financial well-being of average Americans—not stock market indices or corporate earnings.

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