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Just a quick question for the White House and Democrats: Shouldn’t we be hearing a hell of a lot more about the fact that, in the 21 months that Joe Biden has been in office, the net wealth of the bottom 60 percent of Americans has increased a hell of a lot? As the Washington Monthly reports, the Federal Reserve found that
American households across the board have become significantly richer, especially those with low, moderate, and middle incomes.
From January 2021 to mid-2022, the net wealth of the bottom 20 percent of U.S. households jumped $1.23 trillion, translating into an average of roughly $43,000 per household after inflation. The net assets of the next 40 percent of households similarly increased by more than $2.04 trillion, which translates into an average of nearly $35,900 per household after inflation. How did it happen? The paychecks from 10 million new jobs, the administration’s pandemic relief, and elevated saving rates in 2020 and 2021.
Now, to be sure, the administration hasn’t at all been shy about tooting its own horn — deservedly! — about all the job growth. The US economy now has more jobs than it did before the pandemic, and much sooner than many economists had predicted. That’s good stuff to run on in the midterms, for sure.
But why aren’t we hearing more about the increases in family wealth too? That seems like something worth some horn-tootage as well!
One possible reason might be that some of that growth has resulted from inflation, particularly the sharp rise in home values in a pinched housing market; the net wealth measurement includes changes in the values of home, minus the amount people owe on mortgages.
And those “average” increases in household wealth aren’t really evenly distributed, any more than how the average net worth of everyone in an elevator with Elon Musk is in the billions for a few minutes. (Note: We haven’t checked to see whether Musk actually lets non-billionaires ride elevators with him. He may make them ride on the roof.) Maybe campaigns haven’t wanted to get caught up in explaining why a lot of people don’t feel $40K wealthier.
That said, the overall shape of the changes in wealth really are looking like the change in the economy called for by Biden and by Barack Obama before him: growth that’s coming to the middle of the economy rather than “trickling down” from the top. It’s true that folks in the upper parts of the economy are doing better, too, with the rich getting richest, and the top 40 percent of families seeing an average wealth increase of $52,500 after adjusting for inflation.
But look, this is important: The rate of growth in family wealth was actually greater at the lower ends of the income spectrum.
But for the first time in memory, the wealth of households with relatively less income grew much faster than their higher-income counterparts. Here’s the Fed’s data: The value of the net assets of the lowest 20 percent of households by income jumped 36.2 percent, compared to 17.4 percent gains for the next 20 percent. The middle 20 percent enjoyed a 12.4 percent increase, while the top 60 to 80 percent saw a 4.6 percent wealth increase, and the top 80 to 99 percent witnessed a 3.5 percent increase in wealth. And the storied top 1 percent saw the value of their wealth grow 2.4 percent, a sliver of the percentage gains made by the poorest one-fifth of households.
In terms of actual assets, it’s a long way from anything we’d call equality, because 2.4 percent growth in wealth for the One Percenters still works out to an average gain of $562,700. Even so, seeing greater expansion at our end of the wealth spectrum is a huge change from the days of Trump’s Big Fat Tax Cut for Rich Fuckwads, in which nearly all the wealth expanded at the top while the rest of us were expected to be excited over a few extra crumbs.
As the Washington Monthly puts it, Democrats really ought to add this talking point to stump speeches:
Under Biden and a Democratic Congress, Americans at every income level are wealthier today, with lower-, moderate-, and middle-income households making the most significant gains.
While we’re at it, we ought to keep talking up the infrastructure bill, the CHIPS Act, and the Climate bill and all the jobs they’re going to create, not to mention the savings on prescription drugs for seniors that Republicans already want to reverse.
You know what we should do now? We should elect a majority of Democrats to the House, increase their edge in the Senate, and make them pass the expanded Child Tax Credit.
We’re funny like that!
[Washington Monthly / WaPo / Photo: Anthony Quintano, Creative Commons License 2.0]
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