The income mix supporting American households is not what it used to be. As the baby boom generation has moved into retirement, government benefits have grown to nearly one-fifth of personal income. The wage share has moved lower over the same period.

That shift is making traditional monetary policy harder to execute. Rate hikes move through credit, housing, and business investment, but government payments don’t respond the same way. The adjustment keeps falling on the sectors the Fed can still reach, and the people inside them are absorbing it.

Economist Eric Basmajian has spent years tracking the structural forces behind this divide. He joins Market Insider to explain why Social Security is becoming a near-term policy problem and why the decisions made in the next few years will land differently depending on where your income comes from.

Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.