The 50 richest Americans now own nearly the same wealth as half the United States, as Covid-19 transforms the economy in a way that has disproportionately favored a small class of billionaires.
New data from the US Federal Reserve, providing a comprehensive look at the wealth of the United States during the first half of 2020, show marked disparities by race, age and class. While the richest 1% of Americans have a combined net worth of $ 34.2 trillion, the poorest half (about 165 million people) own just $ 2.08 trillion, or 1.9% of the entire household wealth.
For their part, the nation’s 50 richest people have a combined net worth of nearly $ 2 trillion, according to the Bloomberg Billionaires Index, representing an increase of $ 339 billion since the beginning of 2020.
Covid-19 has exacerbated inequality in the United States, while job losses fall heavily on low-wage service workers and the virus disproportionately infects and kills people of color. Meanwhile, many upper-middle-class professionals are working from home, watching their retirement accounts rise in value after the US Treasury and the Fed injected stimulus into the economy and markets.
Another key reason for the wealth disparity is that the vast majority of Americans do not benefit from rising stock prices. The exposure of the last 90% of the population to the stock market has been declining for almost two decades. Since it peaked at 21.4% in 2002, upper-middle-class Americans have seen a 10 percentage point decline in their share of company equity.. A similar pattern is seen in the lower half.
The richest 1% own more than 50% of the equity in corporations and mutual fund stocks, Fed data shows. The next richest 9% own more than a third of equity positions, which is That means that the top 10% of Americans own more than 88% of the shares.
The Fed data also shows that the generation of Millennials, born between 1981 and 1996, control only 4.6% of America’s wealth even though they are the largest age group in the workforce, with 72 million members. And the slice of the pie that African Americans have is the same size as 30 years ago.
Like the country as a whole, the wealth of young Americans is concentrated in a few hands. Three millennials – Facebook Inc. co-founders Mark Zuckerberg and Dustin Moskovitz, along with Walmart Inc. heir Lukas Walton – personally control one in every $ 40 held by their generational cohort.
“The pandemic is further widening the gaps in wealth and economic mobility,” Fed Chairman Jerome Powell said Tuesday, warning that the country’s recovery will weaken without further government help. “A long period of unnecessarily slow progress could continue to exacerbate existing disparities in our economy.”
A few hours after his speech, President Donald Trump told negotiators to halt talks with Congressional Democrats about another aid package until after the November election.
Those whose fortunes are tied to tech companies, who benefited from the shift toward work, shopping, entertainment, and socializing online, have been among the biggest beneficiaries of the COVID-19 economy. Leading the way is Amazon.com founder Jeff Bezos. His fortune, the largest in the world, has risen 64% in 2020 to $ 188.5 billion. On Wednesday alone, Bezos added more than $ 5 billion to his net worth.
White Americans own 83.9% of the nation’s wealth, compared with 4.1% of black households, the data shows. While the share of white Americans in the total has dropped somewhat as the nation becomes more diverse, blacks have the same percentage as in 1990.
Of the 25 richest Americans, only one is not white: Eric Yuan, CEO of Zoom Video Communications Inc., whose fortune has nearly increased sevenfold this year to $ 24.2 billion.
Baby boomers have the majority of America’s wealth, at $ 59.6 trillion, twice the $ 28.5 trillion of Gen X and more than 10 times the $ 5.2 trillion of millennials. .
Fed data shows that Generation X, those born between 1965 and 1980, have made some progress in wealth creation in recent years, doubling their collective net worth since mid-2016.
It is not unusual for younger age groups to be significantly poorer than their elders. Even so, Millennials are still far behind previous generations at the same age. In 1989, when the average Boomer was 34, the generation controlled more than 21% of America’s wealth.. To match that, millennials, with a current median age of 32, will need to quadruple their share of wealth in the coming years.
Young and low-income workers had a glimmer of hope in recent years, as median wages began to rise faster than inflation. But this year, a surge in unemployment threatens to derail this progress, returning the United States to the trend of recent decades, when wealth steadily flowed to the top.
The Fed estimates that the richest 10% of American households own 69% of the nation’s wealth, or $ 77.3 trillion, up from 60.9% in the late 1980s. The wealthiest Americans are almost entirely responsible for this increase. The top 1% owned 30.5% of US wealth in June, up from 23.7% at the end of 1989. Meanwhile, the share of the bottom half has fallen from 3.6% to 1.9%.