Where Did the Money Go?

The pandemic has left its mark on everything, even the distribution of wealth in the US

- Devon Pendleton

In the early days of the pandemic, when markets plunged and 22 million Americans lost their jobs, Congress and the Federal Reserve sprang into action to stabilize an economy at risk of buckling. After trillions of dollars of Covid-19 relief cash and a monsoon of cheap federally sponsored loans, US households are sitting on record savings. But no group benefited more than the one needing the least assistance: the ultrarich.

What’s responsible for those lopsided gains is the vastly different composition of net worth among America’s wealth tiers. Shares of stocks and mutual funds made up more than a third of the fortunes of the richest Americans at the onset of the pandemic. That meant the top 1% enjoyed substantial upside as stocks soared because of the stimulus and investor enthusiasm for anything that stood to gain from the shift to remote work and the changing spending patterns of locked-down consumers. The upside for the bottom 50%, who owned virtually no stocks, was nil.