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Rewriting This: Household Wealth Disparity of Richest and Poorest Families in U.Sget Increased in Pandemic
It’s no secret that among households in the United States, wealth disparity has always been a major issue. However, during the recent global pandemic, this wealth gap has been shown to have widened amongst the country’s richest and poorest people. According to a recent survey conducted by the Pew Research Center and based on data from the Census Bureau – households with more wealth were shown to have increased by $57,800 from 2019 through 2021.
But on the other hand, those households with a net worth of zero in 2019 had a median net worth of $500 by 2021. Altogether, the typical American households had a net worth increase of 30 percent.
It’s believed that one major contributing factor to the rise in household wealth among the richest people is due to the government’s initiatives to provide stimulus payments in the form of the CARES (Coronavirus Aid, Relief and Economic Security) act. In addition to this, individuals with higher incomes have had the opportunity to save up more money due to the restriction imposed on them to stay indoors.
The Wealth Gap Widens – A Gallup Poll
A separate report by Harvard in 2020 showed similar findings, citing that the wealthy have decreased their spending, and businesses closing down as well as the mass layoffs of low-income workers has worsened the wealth gap.
What the Pew study went on to show is that while in 2019 the richer quarter of households held 84 percent of the nation’s wealth, that figure dropped to 82 percent in 2021. Even though the racial and ethnic gaps in wealth still existed, the gap did decrease to an extent – with white households having 13 times as much wealth as black households in 2019, and 9 times as much in 2021.
But as the current economic climate at present is beginning to shift in a less favorable direction, mainly with home values leveling off and a continued trend of spending outside of lower incomes, many Americans have apparently begun to make a dent in their pandemic savings.
The New York Wealth Gap
The state of New York is taking a particularly alarming approach to this current crisis, especially with an expansive income gap, as reported by the New York Times. As of 2020, Manhattan had the largest income disparity when compared to that of any large county in the United States. With the richest fifth of households earning an average of $545,549, and the bottom 20 percent of households earning an average of $10,259 – this is a clear sign that any recent economic recovery in the area has been lopsided.
Manage Your Finances in the Pandemic
Managing personal finances in the pandemic should always start with assessing your spending for a month or two and identification your needs in order for you to survive. This could range from renting and groceries to possible foregone fun activities like travel and such.
Other steps to consider include creating an emergency budget, negotiating payments with your credit card companies, and moving in with family if feasible and your financial situation changes ahold.
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