Dear MEL Topic Readers,
Why America’s rich keep getting richer
In the “K-shaped economy”, the upper arm of the letter “K” represents
the wealthy while the lower arm shows lower-to-middle-income families. In the
last three years in the US, the top 1% earners increased their cumulative real
net worth by 30%, the next 19% earners gained 20%, and the next 20%, classified
as the upper middle group, enjoyed about an 18% increase (Vol 5152), while the middle
40% and bottom 20% had less than a 15% gain. What made the gap wider between
those who gained wealth more and less is housing, stocks, and inflation. Even
though the S&P 500, the benchmark market index, has gained 86% over the
last three years, about three-quarters of America’s stocks are owned by the top 20%
earners. As for housing, over half of mortgages belong to the top 20%, whose
property values have seen steep increases in the last few years. In the meantime, recent
inflation in food, energy, and gas prices, in particular, hit the middle 40% and
bottom 20% of income groups harder because they spend a higher proportion of
their income on those daily necessities. Once dreamed of by middle-income households
were cars and houses, which are now getting out of their reach. How will AI
affect the wealth gap for Americans?
Read the article and learn about the widening gap between the rich and
others.
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