Stock wealth boomed during pandemic for wealthiest 1%

For people who derive most of their wealth from stock equity, it has been a very good financial year. In turn, massive stock market gains in the middle of a global pandemic have widened inequality along both wealth and racial lines.

Although the effects of the COVID-19 pandemic on job loss and wage fluctuation have been felt personally by many North Carolinians, the pandemic’s effect on company stock ownership may be less obvious to the average resident. This is largely because those in the top 1 percent of the wealth index own more than half of all corporate equity and mutual fund shares in the United States, whereas the bottom 50 percent own less than 1 percent. Despite this, changes in share value during 2020 have had a significant impact on economic inequality.

Stock and mutual fund wealth fell off by roughly 23 percent during the first quarter of 2020 when the stock market was first feeling the effects of COVID-19. However, by the end of 2020, equity ownership had not only returned to pre-pandemic levels, it had also surpassed them by over 17 percent. In the last fiscal quarter before the pandemic (Q4:2019), the top 1 percent held $15.10 trillion in stock and mutual funds, which had ballooned to nearly $17.8 trillion by the end of 2020. Last year, the richest 1 percent in the U.S. acquired $2.7 trillion in stock and mutual fund wealth while the poorest half of Americans saw less than $0.03 trillion in this kind of equity wealth growth. A typical household in the top 1 percent amassed around 4,500 times more new wealth in stock and mutual fund growth during 2020 than the average household in the bottom 50 percent.

Barriers to access to stock ownership mean COVID-19 also widened the racial disparity in equity wealth. Black people own only 1 percent of corporate equity and mutual fund shares, while an overwhelming 89 percent of shares are owned by white people. As a result, the growth of the stock market over the last year has exacerbated the pre-existing economic inequality between Black and white workers, further concentrating wealth in a small number of rich bank accounts.

Emma Cohn is an intern at the N.C. Budget & Tax Center.

Top Stories from NCPW

  • News
  • Commentary

With nearly 200 active COVID cases among students and staff, board will revisit mask mandate Monday [...]

Like millions of women, Sarah Anderson saw her income drop during the pandemic when her two part-tim [...]

Proposals would fund universal pre-K and free community college, hasten shift to renewable energy WA [...]

Last week, the Prison Policy Initiative published a report – "States of Incarceration: The Glob [...]

Vaccine refusal is a major reason COVID-19 infections continue to surge in the U.S. Safe and effecti [...]

Abortion is a common and normal part of the range of reproductive healthcare services that people ha [...]

Zac Campbell paused suddenly and took a minute to gather himself, while colleagues shuffled toward h [...]

Read the story by reporter Lisa Sorg here. The post Clear and present danger: Burlington’s Tarheel A [...]

A Clear and Present Danger

 

NC’s Tarheel Army Missile Plant is a toxic disgrace
Read the two-part story about the Army’s failure to clean up hazardous chemicals, which have contaminated a Black and Hispanic neighborhood for 30 years.

Read in English.


Haga clic aquí para leer: Peligro inminente
Una antigua planta de misiles del Ejército ha contaminado un vecindario negro y latino durante 30 años.

Leer en español.