A Blog by Jonathan Low

 

Dec 23, 2021

How the Pandemic Has Made Everyone Richer, Especially the Lower 50 Percent

Paying people more and giving them government support during the pandemic has positively impacted the financial situation of many poorer people. Who would have thought?  JL 

Ben Carlson reports in A Wealth of Common Sense:

The net worth of American households has gone from $110 trillion to $137 trillion since the pandemic disrupted our lives in the first quarter of 2020. The top 1% who predominantly hold financial assets and financial assets have had a really nice two-year run. (But) the bottom 50% have also seen their wealth soar. In fact, on a relative basis when compared to pre-pandemic levels, the bottom 50% has seen the biggest percentage gain in net worth of any group. It turns out giving people money and paying them more is good for their bottom line.

The net worth of American households has gone from $110 trillion to $137 trillion since the pandemic disrupted our lives in the first quarter of 2020.

That’s from new Federal Reserve data through the end of the third quarter 2021, which was released last week.

As is often the case, those gains have not been equally distributed.

It’s no surprise the top 1% have seen their wealth surge throughout this ordeal:

They’re the ones who predominantly hold financial assets and financial assets have had a really nice two-year run so this makes sense.

This one may surprise you — the bottom 50% have also seen their wealth soar:

In fact, on a relative basis when compared to pre-pandemic levels, the bottom 50% has seen the biggest percentage gain in net worth of any group:

Bloomberg calculated the difference between the most recent update and pre-pandemic levels to show how the share of wealth has changed because of this:

It wasn’t hard to predict the rich would get richer when this thing got underway. I’m not sure anyone expected the people on the low end of the wealth scale to benefit so much. It turns out giving people money and paying them more is good for their bottom line.

Who would have thought?

But an interesting dynamic is playing out in the middle class. Those households are slowly but surely seeing their share of the overall pie shrink:

This cohort made up 37% of the country’s wealth in 2003. It’s now under 28% of the total.

Meanwhile, the share of wealth owned by the top 1% has gone from 25% in 2003 to more than 32% as of the latest reading.

Both groups have seen their wealth rise in this time. It’s just the top 1% has gone from $11 trillion to $44 trillion and the 50-90% group has seen their wealth go from $16 trillion to $38 trillion.

While “everyone” is richer1 than they were just a few short years ago, consumer sentiment is falling off a cliff:

There are many reasons for this. We’re all fed up with the pandemic. People really hate inflation. And gauging sentiment is becoming harder in the information age.

But I also think a big part of this stems from the fact that it’s not easy for certain individuals, households or groups of people to feel like they’re part of an unfair system. Seeing other people get richer at a faster pace than you can mess with your brain.

Frans de Waal performed a fairness study with monkeys that shows this idea better than any sentences I could write about it:

This is a pretty good representation of how our brains work when it comes to money and wealth. Charlie Munger once said, “It’s not greed that drives the world, but envy.”

So even with wealth at all-time highs, a booming stock market and the highest economic growth in decades, many people are still unhappy.

This doesn’t make sense from a textbook perspective.

It does make sense from a human nature perspective.

Unfortunately, most of us see the world through the lens of relative, not absolute gains.

1 comments:

FIRMWARE said...

Hire the best and fastest HACKERS on the web today. We give you HACKING SERVICES better than any HACKING group you can find in the internet. Our HACKERS are available for 24/7, always ready to attend to you at any time of the day, anywhere in the world.

There are no limits to what we can do. Don’t be surprised we say this. Hacking isn’t as difficult as it sounds, as so many HACKING equipments(softwares, virus, spyware, Trojan) are made available in the dark web and this has made HACKING very easy to perform. There are different varieties of Hacking Service we offer, such a as
✅Phone /Computer Hacks & Tracking
✅Emails & Social Media account Hacks/password recovery
✅Raising Money using (Bitcoin Mining, Money Flip e.t.c)
✅Recovery of deleted files e.t.c

If you need hacking services,FIRMWARE are the group you should contact. We have a strong policy that covers our Customers Privacy. We do not ask our Customers Targets and intention for any job given to us, we simply do our job and provide a strong security to customers so that our services can’t be traced to them.

Payment for our services will only be collected after Customers have certified and confirmed the completion of their job. For no reason do we collect upfront for services. But note that Customers will have to pay for Hacking Equipments if necessary before a job would be done.

Beware of FRAUDSTERS claiming to be HACKERS and ripping people of their money, they saying things and share false testimonies to Attract people and Lure them. They are everywhere in the internet even here in this site, be careful of them. We have come across so many of this FRAUDSTERS Victims and some have been lucky to get back what was falsely taken from them.

Below are list of our emails you can contact if you need our services
Email-:
firmwarehacks@gmail.com
firmwarehacks@gmail.com
FIRMWARE
2021 © All Right Reserved.

Post a Comment