Fact or Fiction: The wealthiest 10% of Americans own 90% of U.S. stocks

Fact+or+Fiction%3A+The+wealthiest+10%25+of+Americans+own+90%25+of+U.S.+stocks

JILLIAN SYLVESTER

ince the beginning of the pandemic, the stock market has nearly doubled. And, even though fifty-five percent of Americans own stocks, this statement is FACT. During the pandemic, the bottom ninety percent of Americans in terms of wealth held around eleven percent of individual stocks which, prior to the pandemic, was twelve percent. As the stock market has doubled since the start of the pandemic, it became the biggest way of creating money during that period. However, this does not mean that everyone was fruitful. For the top one percent, seventy percent of their wealth gain during the pandemic was from stocks. 

Even though the stock market was the main source of money creation during the pandemic, it has also created considerable wealth inequality. In the lower half of the income scale, about thirty percent of people in this bracket own stock holdings. In the next forty percent of the income scale, seventy percent own stock holdings. In the top ten percent, over ninety percent of them own stock holdings. To look further into stock market inequality with other aspects like race, view this study by the Pew Research Center. 

The stock market requires time and money to be able to consistently obtain mass amounts of wealth from it. People outside of the top ten percent mostly own stocks because of their 401k retirement plans (fifty-two percent of Americans), while only fourteen percent of Americans have invested in individual stocks. The top ten percent controlled eighty-four percent of the total stock values of 2016, even though almost half of American households held indirect or direct stocks. Stock market inequality is real and the pandemic only made it worse. 

So, why is this important? The gains the top ten percent earn from the stock market has widened the wealth divide of the American economy. If they continue to control the stock market and continue to amass wealth from it, the rich will only get richer and the poor will only become poorer. Federal reserve economics Isabel Cairo and Jim Sim looked into why the rich were getting richer and the main factor is owners of assets and stocks benefit from how corporate power and profits are rising alongside the decline in labor. 

Sources:

https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-americans-own-a-record-89percent-of-all-us-stocks.html

https://www.forbes.com/sites/teresaghilarducci/2020/08/31/most-americans-dont-have-a-real-stake-in-the-stock-market/?sh=4af780901154

https://www.federalreserve.gov/publications/2017-September-changes-in-us-family-finances-from-2013-to-2016.htm

https://www.cnbc.com/2020/08/27/wealth-gap-grows-as-rising-corporate-profits-boost-stock-holdings-controlled-by-richest-households.html