A Less Unequal America

The collective wealth of the bottom 50% of households has almost doubled in two years. Are the gains permanent?

So far, 2022 is on quite a roll: war, inflation, market selloffs, recession worries, virus lockdowns in China, and record-breaking consumer pessimism in the US, plus a new book by inequality expert Thomas Piketty spotlighting the unfairness of it all.

Amid all the gloom, the most unequal of the world’s leading economies has gotten less so. The poorest half of Americans—the much-discussed but largely powerless US working class—are in their strongest financial position in a generation.

The bottom 50%, generally households with net worth of $166,000 or less before the pandemic, now hold a bigger share of the nation’s wealth than they’ve had for 20 years, the Federal Reserve estimates. Their collective net worth, $3.73 trillion, has almost doubled in two years and is more than 10 times higher than in 2011, the nadir after the last recession.

The improvement is a result of trillions of dollars in Covid-19 relief and a strong labor market that remains hottest for the lowest-income workers. The two developments are closely linked: People such as Mingus Daniels-Taylor, 28, could sock away extra unemployment and stimulus checks while also making moves to better their financial situations in the long term.