Friday, January 19, 2024

Wealth disparity in USA

This is hardly a shock horror moment. All sorts of data shows the disparity in wealth, no matter how measured, between the minority ruling class and the majority working class. How many though are asking themselves how did they acquire all this?

A huge 93 percent of stock market wealth in the US is held by the richest 10 percent of the population - a new record. While Americans on the whole have been investing in the stock market at a higher rate, the amount of wealth held is still skewed toward the richest households.

According to Federal Reserve data, 92.5 percent of equities are held by the richest 10 percent of Americans - meaning it is largely the already-wealthy who are benefiting from last year's stock market boom.

Following a disastrous 2022, Wall Street rallied in 2023. The benchmark S&P 500 index gained 24 percent last year alone, driven mainly by the so-called 'Magnificent Seven' tech stocks including Apple and Microsoft.

Lawmakers were among those who made the most out of trading stocks last year, it has emerged, with some members of Congress making returns as high as 238 percent.

Two decades ago, in 2004, 81.6 percent of stock market wealth was held by the richest 10 percent of the population, Fed figures show.

In 2014, it had risen to 86.8 percent, and has increased steadily since to the most recent figures from 2022.

While much has been said about Americans turning to investing during the pandemic - when they had more time and disposable cash on their hands - it appears that stock ownership has not shifted too much from the richest households.

A record 58 percent of households owned stocks in 2023, according to the Fed's Survey of Consumer Finances, but in the aggregate the amount of stock most people own is small.

The bottom 50 percent of Americans by wealth owned just 1 percent of all stocks and mutual fund shares in the third quarter of last year, central bank data shows.

In the third quarter, the bottom 50 percent of households held $4.8 trillion of real estate assets, but just $0.3 trillion worth in stocks, according to Fed data cited by Business Insider.

The top 1 percent, by comparison, held over $16 trillion in stocks, and just over $6 trillion in real estate assets.

Stock market booms have traditionally reaped the most rewards for those who are already wealthy, researchers said in a 2020 study.

That is because the richest tend to have their assets tied up in equities, while the middle-classes tend to have their money in housing, the study said.

Over the past decade, the S&P 500 index has gained 155 percent, while the tech-heavy Nasdaq has risen by a huge 250 percent.

MailOnline 12 January 2024

https://www.dailymail.co.uk/yourmoney/banking/article-12952963/ultra-rich-record-share-stocks.html




2 comments:

Mr. Magoo said...

In a boom, the poor benefit the least & the rich benefit the most, but in as slump, the poor suffer the most & the rich suffer the least.

cynical but optimistic said...

Spot on! I had to lookup a half remembered quote about rich and poor and bridges. This is it. Anatole France.
The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.