The wealthiest 10 percent of Americans now own 89 percent of all stocks held by households in the U.S., further deepening wealth inequality.
Amid the COVID-19 pandemic, many Americans were forced out of their homes, unable to work and surviving the best way they knew how. On the other end of the tax bracket, the top 1 percent gained more than $6.5 trillion in corporate equities and mutual fund wealth, CNBC’s Robert Frank reports.
According to data from the Federal Reserve, the bottom 90 percent of Americans added only $1.2 trillion in wealth during the pandemic.
And the same goes for stocks. By the second quarter, the share of corporate equities and mutual funds owned by the top 10 percent grew to record levels. The bottom 90 percent of Americans held only 11 percent of individually held stocks.
The stock market has nearly doubled since March of 2020 and is both the main driver of wealth creation during the pandemic and the main driver of wealth inequality.
“The top 1% own a lot of stock, the rest of us own a little,” said Steven Rosenthal, senior fellow, Urban-Brookings Tax Policy Center.
The shift comes after new investors moved into the stock market for the first time during the pandemic. CNBC reports that Robinhood, an American financial service, opened more than 10 million new accounts in the last two years.
“Many of the younger investors also bought in at higher prices, compared to bigger investors who have been in the market for years and see larger gains,” Rosenthal said.
