Dallas Figures released by the Federal Reserve indicate that citizen wealth by some indices is recovering almost to pre-recession levels. According to the Wall Street Journal:
The net worth of U.S. households and nonprofit organizations—the values of homes, stocks and other assets minus debts and other liabilities—rose 2.6%, or about $1.9 trillion, in the third quarter of 2013 to $77.3 trillion, the highest on record, according to the Federal Reserve.
The Fed’s figures aren’t adjusted for inflation, but even after accounting for rising costs—using the Fed’s preferred inflation gauge—Americans’ net worth is at record levels. The figures also aren’t adjusted for population growth, and the nation’s wealth is roughly 1% short of its peak according to another commonly used gauge, the consumer-price index.
So, that’s the good news.
The bad news is that these record setting levels are masking the fact that the same upward sweep is increasing inequality, the gap between the richer and the poor, since these good times are being disproportionately enjoyed by those folks with money in the stock market, and that’s not the poor, and equity has risen for homeowners, who were able to hang on, but that’s also no longer a tide rising lots of boats. With homeownership gains for African-American and Latino families having been rolled back to levels of thirty years ago obliterating the advances, and wiping out all of their equity, these are gains being felt by the more well off survivors of the housing crash or those lucky enough to have the resources to hang on.
Unemployment numbers continue to be high and underlying these numbers are significant levels of structurally permanent unemployment with four million workers unemployed more than six months and increasingly dropping out of the job market entirely. Since these gains in citizen wealth are coming from ownership rather than employment, it also masks wage stagnation for the vast majority of working families, even as high end, big rollers have regained pay levels at the top.
Even when there’s some good news, it’s impossible to be happy about Federal Reserve statistics that essentially establish that American citizen wealth is increasing to record levels but only for some people, not for everyone.