The survey’s overall wealth measure does not include defined benefit pension plans and Social Security benefits, which are hard to value. An augmented measure that incorporates pension plans shows that wealth at the top has still risen, but by less, according to the Fed report.
Financial assets have long been particularly concentrated in the hands of the rich, and that trend persisted through 2019. The median family among the wealthiest 10 percent held about $780,000 in stocks, directly or indirectly, last year. The median family in the bottom quarter held about $2,000, the data showed.
The percentage of lower-wealth households who held some stocks climbed, but remained far lower than for the rich. About 95 percent of the wealthiest families hold stocks, compared to one of every five households in the bottom 25 percent.
That means that while lower-wealth families may have been less touched by stock market declines in the spring, they also did not benefit nearly as much when prices surged this summer.
President Trump often highlights the stock market’s performance as a signal of success, but it does not speak to how many Americans are doing financially.
The Fed’s newly released figures also underline that dramatic gaps in income and wealth persist across racial groups. Black families’ median wealth is less than 15 percent of white families’ net worth — it stood at just $24,100 in 2019 to $188,200 for white households. Hispanic families held $36,100.
The concern now is that inequities could deepen as workers at the bottom lose jobs and incomes.
The unemployment rate was 8.4 percent in August, according to the Labor Department, but the rate was 13 percent for Black people. Likewise, the jobless rate for those with less than a high school diploma was more than twice that for adults with a bachelor’s degree or more.
Article source: https://www.nytimes.com/2020/09/28/business/economy/coronavirus-pandemic-income-inequality.html
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