In recent years, many have wondered why what appears to be good economic news like a record-breaking stock market and a falling unemployment rate has failed to either make much of an impression with the public.
But it should not be such a mystery at all. We know better now than we did 20 years ago that this rising tide doesn’t lift all boats. Only about half the population is invested in the markets. And even among those with money in the markets, many aren’t exactly investing riches. The top ten percent of wealth holders in the United States own an estimated 85 to 90 percent of stocks. African Americans are less likely to invest in the market than their white peers, and millennials, as a group, are also unenthusiastic investors.
Meanwhile, a report by the Economic Policy Institute found that chief executives, flush with stock options, are making out like bandits. Last year, when stock options were taken into account, the chiefs at the 350 largest U.S. companies received an average of $18.9 million for their services, a nearly 18 percent increase over the previous year, and 72 percent since 2009. Nice work if you can get it.
For the rest of us, pay remains stagnant, with recent — and not exactly robust — nominal gains being erased by by inflation. At the same time, life can feel increasingly unaffordable. Child care is staggeringly expensive, while the percentage of Americans with employer-provided health insurance who need to meet a four-figure deductible is rising rapidly, no doubt a factor in why one of three campaigns on the depressingly omnipresent GoFundMe are medical fundraisers. Four out of ten people say they couldn’t come up with $400 in an emergency. Consumer sentiment is falling even as retail sales increase. New business formation is falling dramatically. The government safety net continues to deteriorate.
Finally, too many are dependent on the markets for their retirements. Few workers outside of government employees currently enjoy access to pensions, with the result being that they are bound to use 401(k)s and Individual Retirement Accounts to attempt to provide for their post-work lives. The money in these accounts is mostly invested in the stock market. Even if the amounts in question are not exactly riches (half of those invested in the stock market have a sum total of $40,000 or less in play), it is enough to create a palpable sense of fear among many anytime the stock market indexes swoon — a “heads I don’t win, tails I lose” situation.
No wonder there is little notice of Wednesday’s milestone. A record bull market means something. But for most Americans, it is nothing to celebrate.