From the Editors

The downside of an up market

The soaring stock market has increased U.S. wealth—and inequality.

Investors in the U.S. stock market are riding what some are calling the longest-running bull market ever seen in the American economy. By some calculations, the market has been on the rise since March 9, 2009, and during that period it has created some $18 trillion in wealth. Many Americans are celebrating this run, and over the past decade politicians of both parties have taken credit for it.

But the personal wealth created by the stock market is concentrated dramatically in the hands of the wealthiest households. Of the $18 trillion created, 85 percent of it—or about $15 trillion—has gone to the richest 10 percent. About half of all Americans have nothing at all invested in the market. The median American household has 34 percent less wealth than it did before the Great Recession.

The booming stock market has thus amplified the inequalities in wealth that have been steadily increasing over the past four decades. In that period, the top 1 percent of Americans have seen their share of the nation’s wealth rise from 24 percent to 39 percent, a concentration of wealth not seen since the early 20th century. Though the president calls this the “greatest economy on record,” it is not that for hourly workers, who have seen their wages remain flat over the past ten years and their earnings outpaced by the cost of housing. A recent United Way study found that 43 percent of households don’t earn enough to cover the basics—housing, food, child care, health care, transportation, and a mobile phone.