Americans are richer than ever. The stock market closed at a record high on Thursday. Filings for unemployment benefits just fell to a 48-year low. Consumer confidence is soaring. The poverty rate is extending a three-year slide, A Washington Post story stated last week.
The income disparity between the classes is growing, as advances by upper-income households outpace those of the middle and lower tiers. Earnings by the typical American household remain mired around where they were before the recession. Wages are inching up, despite a tight labor market, and inflation is all but wiping out those gains.
It’s a tale of two economies. The strength reflected in the headline numbers remains the GOP’s best defense against a midterm wipeout. But lurking just beneath them are reminders that the recovery remains patchy, and its gains have been unevenly distributed, The daily published from the nation’s capital, reported.
Bank of America Merrill Lynch points out that, like income, wealth in the United States is held by a declining percentage of the population. In 1992, 54% of all financial wealth was held by the top 10% of earners; today 63% is. The latest numbers from Gallup show that just 52% of Americans own stocks — the lowest percentage on record — down from 65% in 2007.
According to Market Watch, average annual earnings for people in their prime working years (ages 25 to 54) increased 30.2% after inflation between 1979 and 2016, based on an analysis of data from the Bureau of Labor Statistics by the Economic Policy Institute, a nonprofit think tank that advocates for low-to-moderate income Americans. For the most part, however, that growth isn’t a reflection of higher hourly wages — instead it’s an indication that people are working more hours, researchers found.
For the bottom fifth of earners, an increase in wages only accounted for 25% of annual earnings growth, compared with 88% of earnings growth for the top fifth, or richest, earners.
Altogether, prime-age adults worked 7.8% more hours per year in 2016 than they did in 1979. But workers in the bottom fifth in terms of annual earnings upped their hours by 24.3% over that time span, compared with just a 3.6% uptick among top earners. People in the middle-class in terms of wages increased their hours by 9.4%.
The high-flying stock market, combined with a steady recovery in home prices during the last several years, has pushed total household net worth in the United States to about $95 trillion — nearly $30 trillion more than before the last recession began in 2007. As a percentage of disposable income, household net worth just hit a new peak, which means that wealth in the United States relative to the size of the population is now at the highest level on record. We’re rich!