According to Fortune, Oxford Economics CEO Innes McFee states that AI has already delivered more than a 7% uplift in household wealth for U.S. consumers. However, this “powerful boost” has mostly benefited high-income Americans, reinforcing a “K-shaped” economy where the wealthy rise and lower earners stagnate. McFee believes this divergence, driven by the “wealth effect” from AI investments, is likely to persist until 2035. He notes that while AI could eventually help close the gap, that unification is at least five to ten years away. The data is stark: since Q3 2010, the wealth of the top 0.1% has grown 281% to $24.89 trillion, while the bottom 50%, despite 1,189% growth, hold just $4.25 trillion combined.
The Productivity Paradox
Here’s the thing that makes this so tricky. The long-term hope for AI leveling the playing field hinges on productivity gains for low-skilled jobs. McFee says that’s the key—if AI tools can boost output for those roles, real wages could rise. But we’re not there yet. Not even close. The modeling suggests AI adoption in business will follow an S-curve, really taking off and then plateauing in the early 2030s as the low-hanging fruit is picked. And get this: a report from the Penn Wharton Budget Model points to that exact plateau. So we’re looking at a long runway before those foundational productivity boosts for average workers materialize. In the meantime, the wealth generated by AI stocks and corporate investments just keeps flowing uphill.
The Hollowed-Out Middle
Now, let’s talk about jobs, because that’s where the K-shape gets really visible. McFee predicts a “hollowing out” of middle-skilled roles. Think about it. Trade jobs like plumbers and electricians might actually see a boom from building and maintaining AI data centers. And high-skill jobs requiring critical analysis are harder to fully automate. But the middle? Those are the roles packed with procedural, task-oriented work that AI is scarily good at augmenting or replacing. McFee compares it to the uneven job growth after the 2008 financial crisis. We’ll likely see growth at the bottom and the top, but a squeeze in the middle. That’s a brutal recipe for inequality, because it attacks the traditional career ladder people use to climb into the upper tier.
A Decade of Divergence
So what does this mean? Basically, we need to strap in. The narrative that AI will quickly uplift everyone is, frankly, optimistic to the point of being naive for the medium term. The Federal Reserve’s distribution data shows the divide isn’t new, but AI is pouring jet fuel on it. The “wealth effect” McFee describes is powerful—when your stock portfolio and home value soar, you spend more, which drives the economy. But when that wealth is this concentrated, the economy becomes lopsided, driven almost exclusively by the sentiments of the “well-to-do,” as Moody’s Mark Zandi observed. We’re talking about a economic reality shaped by this tech for the next decade. The promise of a more equitable AI future is out there, maybe post-2035. But the next ten years? They look like a period of acceleration on two very different tracks.
