U.S. Household Wealth Rose Before the Pandemic, but Inequality Persisted

A Federal Reserve survey of family finances shows that inequality was high last year. It’s likely to worsen because of the pandemic.


By Jeanna Smialek

Families were making gains in income and net worth in the three years leading up to the pandemic, according to Federal Reserve data released on Monday, but wealth inequality remained stubbornly high.

Median household net worth climbed by 18 percent between 2016 and 2019, the Fed’s Survey of Consumer Finances showed, as median income increased by 5 percent. The survey, which began in 1989, is released every three years and is the gold standard in data about the financial circumstances of U.S. households. It offers the most up-to-date and comprehensive snapshot of everything from savings to stock ownership across demographic groups.

The figures tell a story of improving personal finances fueled by income gains, the legacy of the longest economic expansion on record that had pushed the unemployment rate to a half-century low and bolstered wages for those earning the least. Yet despite the progress, massive gaps persisted — the share of wealth owned by the top 1 percent of households was still near a three-decade high.

Nearly all of the data in the 2019 survey were collected before the onset of the coronavirus. Economists worry that progress for disadvantaged workers has probably reversed in recent months as the pandemic-related shutdowns threw millions of people out of work. The crisis has especially cost minority and less-educated employees, who are more likely to work in high-interaction jobs at restaurants, hotels and entertainment venues. Many economists expect the crisis to worsen inequality as lower earners fare the worst.

“The economic downturn has not fallen equally on all Americans and those least able to shoulder the burden have been hardest hit,” Jerome H. Powell, the Fed chair, said at a news conference earlier this month. “In particular, the high level of joblessness has been especially severe for lower wage workers in the services sector, for women and for African-Americans and Hispanics.”

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