The Great Recession destroyed trillions of dollars in wealth and economic output. Amd in what looks like a measure of good news, most of the household wealth that was vaporized is back. However, it’s almost all going to the rich:
While the stock market has roared back to record highs, home equity is only recovering slowly, and worker wages have been stuck in neutral, barely moving. The richest 1 percent of Americans have captured 121 percent of the income gains since the recession, meaning that everyone else is worse off in terms of income than they were before the crash.
Corporations have also captured a disproportionate share of the recovery. Since 2008, corporate profits have actually risen 20 times faster than worker incomes. According to a study from economists at Northeastern University, “corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1%.” So while it’s a good thing that wealth is slowly being rebuilt, it’s not yet helping the vast majority of the country.
Surging stock prices and steady home-price increases have finally allowed Americans to regain the $16 trillion in wealth they lost to the Great Recession. The gains are helping support the economy and could lead to further spending and growth.
The recovered wealth – most of it from higher stock prices – has been flowing mainly to richer Americans. By contrast, middle class wealth is mostly in the form of home equity, which has risen much less. [...]
The upper-income Americans who have benefited most from the nation’s recovered wealth don’t tend to spend as much of their money as Americans overall do.
But they’ve gotten a lot richer. The Dow Jones industrial average has just set a record high. Since bottoming in March 2009, the Dow has jumped 119 percent. Roughly 80 percent of stocks are held by the richest 10 percent of households.
For the past five years, middle-class Americans have sold stocks and missed out on much of the rebound. During 2012, Americans dumped $204 billion in stocks, the Fed’s report showed.
While the stock market has roared back to record highs, home equity is only recovering slowly, and worker wages have been stuck in neutral, barely moving. The richest 1 percent of Americans have captured 121 percent of the income gains since the recession, meaning that everyone else is worse off in terms of income than they were before the crash.
Corporations have also captured a disproportionate share of the recovery. Since 2008, corporate profits have actually risen 20 times faster than worker incomes. According to a study from economists at Northeastern University, “corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1%.” So while it’s a good thing that wealth is slowly being rebuilt, it’s not yet helping the vast majority of the country.
No comments:
Post a Comment