The End Of Upward Mobility – AI is coming for the meritocracy

The piece defines and documents a new ruling formation called the homoploutic class: households that sit simultaneously at the top of labor-income and capital-income distributions. In the United States roughly 30% of the top labor-income decile - or about 3% of the population - qualify, making the U.S. an extreme case compared with other countries. Capital income is far more concentrated than wages: 60% of American households receive little or no cash income from capital, the capital-income Gini is about twice that of disposable income, and the top 1% of capitalists averaged nearly $100,000 per person in capital income in 2022. The fusion of high salaries and sizeable portfolios makes homoploutic households insulated from both labor-market and market downturns, effectively internalizing the old capital-labor antagonism. Credentialed hard work functions as ideology to justify inherited advantage - parental investment in elite education amounts to an inheritance equivalent the authors estimate at roughly $10 million per child - so mobility has already narrowed.

Artificial intelligence threatens to rearrange that fusion by shifting the balance between capital and cognitive labor. The crucial empirical hinge is whether AI will act primarily as a complement to high-premium cognitive work or as a substitute. If AI augments elite labor while boosting returns to machine-owned capital, homoploutia thickens into a sturdier, self-reproducing aristocracy as elites buy the expanding capital. If AI substitutes for elite cognitive tasks, the wage premium dissolves and the homoploutic structure risks collapse; the social outcome therefore depends directly on AI’s relation to high-skilled labor.