US wages plummet to 43% of national income — lowest since the Great Depression. Did Nixon’s gold breakup kill paychecks?

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American workers are getting a smaller slice of the economic pie — and some people blame it on a decision made more than 50 years ago.

A Kobeissi Letter chart (1) based on Federal Reserve Bank (FRED) data (2) has been making the rounds online (3). It shows wages and salaries at roughly 43% of U.S. gross domestic income in the first quarter of 2026. Taken from a government data series going back to 1929, that share is nearly the lowest since the Great Depression began.

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But it doesn’t mean Americans suddenly took a 57% pay cut. The figure only counts wages and salaries. It leaves out benefits that employers pay for workers, such as health insurance and retirement plans.

Americans are still getting raises, too. The latest Employment Cost Index (4) from the U.S. Bureau of Labor Statistics (BLS) found wages and salaries rose 3.2% over the 12 months leading up to June 2026.

However, when you zoom out, there remains a problem. Workers are producing much more than they did decades ago — but their pay hasn’t kept up, to say the least.

So, what happened?

One popular theory points to a decision made on Aug. 15, 1971 — the day when President Richard Nixon cut the U.S. dollar’s last tie to gold.

Cutting all ties to gold

For years, the U.S. dollar had a link to gold through the Bretton Woods system (5), which was established at the tail-end of World War II to regulate the global monetary system with a series of new rules and institutions, including the creation of the International Monetary Fund (IMF).

Among other things, it required foreign governments and central banks to guarantee the convertibility of their currencies into U.S. dollars, which could then be traded for gold bullion at a fixed price of $35 an ounce.

By the late 1960s, though, that system was under pressure. There were more dollars held overseas than the U.S. had gold to back them. Inflation was also rising.

Then, on Aug. 15, 1971, Nixon stopped allowing dollars to be converted into gold (6), helping bring the Bretton Woods system to an end.

Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going

Did taking the dollar off gold hurt American workers?

After World War II, worker compensation and productivity moved up together. From 1947 to 1973, productivity grew by an average of 2.8% per year, according to the BLS (7). Real hourly compensation grew by almost the same amount, 2.6% per year.

By the end of the 1970s, the two started to pull apart.

Today, the gap is huge. The Economic Policy Institute’s Productivity-Pay Tracker (8) says productivity rose 93.2% from late 1979 through the first quarter of 2026. At the same time, its measure of hourly pay rose just 33.7%.

The timing has made 1971 famous among critics of today’s money system. Former Rep. Ron Paul (9), one of the country’s best-known supporters of gold-backed money, has even called Aug. 15, 1971, “the turning point in the people’s economic fortunes.”

His argument is simple: Once Nixon cut the dollar’s last tie to gold, there was less holding back the creation of new money. Paul says that helped weaken the dollar’s buying power over time. Thus, workers are left with paychecks that don’t stretch as far.

But there’s an important catch: Timing doesn’t prove cause.

Economists have pointed to plenty of other changes that could have held wages back. They include globalization, new technology, automation and weaker unions. A 2025 study from the Federal Reserve (10) even argues that rising household debt may have played a role.

So, Nixon’s gold decision isn’t necessarily a smoking gun. But it did mark the start of a very different era for the American dollar, and it’s easy to see why some investors still don’t want all of their wealth tied to the dollar.

Make your own gold standard

Whatever you think happened in 1971, there’s one big difference today: The government no longer promises to swap your dollars for a fixed amount of gold.

Investors can still buy gold, however.

If you’re worried about inflation, the value of the dollar or the next economic shock, gold has long been regarded as a safe haven asset. It doesn’t depend on one company’s profits and isn’t tied directly to the stock market’s performance.

If the story of what happened after 1971 has you worried about the dollar losing buying power, there’s a way you can add physical gold to your retirement mix without hoarding bars of it in your closet.

For example, Goldco helps investors open IRAs that can hold qualifying physical gold and silver while keeping the tax benefits of a retirement account. Their gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the protective benefits of investing in gold.

Goldco will also match up to 10% of qualified purchases in free silver. And if you decide to sell later, its guaranteed buyback program offers a way to sell your metals back to the company based on market value.

You can get started by downloading Goldco’s free gold and silver guide to learn more about investing in precious metals and whether it makes sense for your retirement plan. Just remember: gold is usually best used as one part of a well-diversified portfolio.

From earner to owner

Most people earn money by working. But wages are only one part of the U.S. economy. Owners can also make money from businesses, stocks and real estate.

If workers are getting a smaller share of the pie, owning assets gives you another way to take a slice.

Real estate is one good option. A rental property can produce monthly income while still having the chance to rise in value over time. The problem is that buying a rental home usually takes a big down payment — and then you have tenants, repairs and other work to deal with.

That hasn’t stopped wealthy investors from loading up on real estate. In fact, it makes up nearly 25% of the typical family office portfolio. But for everyday investors, the big down payment, ongoing costs and work of being a landlord can make it much harder to get in on the action.

That’s where mogul comes in. This real estate investing platform offers fractional ownership in blue-chip rental properties, giving investors access to monthly rental income, property appreciation and tax benefits — without buying an entire home or dealing with late-night tenant calls.

Each property goes through a vetting process that requires a minimum 12% projected return even in downside scenarios. Across the platform, mogul reports an average annual IRR of 18.8%, with average cash-on-cash yields between 10% and 12% annually. Offerings often sell out in under three hours, with investments typically ranging from $15,000 to $40,000 per property.

Getting started is simple. Sign up for an account, browse the available properties and verify your information with the mogul team. From there, you can start building a rental property portfolio in just a few clicks — without becoming a full-time landlord.

And for investors with more money to put to work, multifamily real estate offers another option.

Real estate with a bigger portfolio

JPMorgan notes in its research on multifamily real estate during a recession (11) that home sales may fall in a downturn. However, people who put off buying a home still need somewhere to live, which can keep them in the rental market longer.

That’s why you could also leverage multifamily real estate investing. In the same report prepared by JPMorgan, Al Brooks — the firm’s vice chair of Commercial Banking — said, “I think multifamily housing is absolutely where you want to be as an investor.”

That’s quite an endorsement.

Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.

Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.

With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.

Put more than one kind of asset to work for retirement

There’s no single investment that fixes the problem shown by America’s wage chart.

But there is a simple takeaway: Your paycheck doesn’t have to be your only tool for building wealth.

Stocks can give you ownership in businesses. Real estate can give you a share of rental income. Gold can add an asset that sits outside the stock market and today’s dollar-based money system.

And you don’t necessarily need separate retirement accounts for each idea.

IRA Financial gives you the freedom to invest in alternative assets like real estate, private equity, precious metals and crypto within a self-directed retirement account. And now you can add real-time, public market investing, powered by Interactive Brokers, a trusted global brokerage.

For the first time, you can manage both traditional and alternative assets seamlessly within a single self‑directed retirement structure, all for a flat fee.

Complete the application online in minutes to open your self‑directed retirement account with stock-trading access powered by Interactive Brokers.

Bottom line

You don’t need to solve a 55-year-old economics debate to take a lesson from it. If earning a paycheck is giving workers a smaller slice of America’s economic pie, owning assets gives you another way to get a piece.

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

X (1), (3); Federal Reserve Economic Data (2); Bureau of Labor Statistics (4), (7); Federal Reserve History (5), (6); Economic Policy Institute (8); Ron Paul Institute (9); U.S. Federal Reserve (10); J.P. Morgan (11)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.