The Problem

Belief in the power and potential of broad-based property ownership has been a bedrock and bipartisan principle of American political life. Despite its central appeal, we find ourselves early in the 21st century with the most bifurcated economy since the eve of the Great Depression.

 

Evidence to this effect is all around us:

Highly Concentrated Business Capital

Though Americans have long equated the state of the economy with the health of the stock market, fully half of Americans own zero stock whatsoever—this includes mutual funds in addition to retirement accounts such as IRAs and 401(k) plans. In the United States, the top 10% own 84% of all stock; the top 1% of households own 56% of all public and private equity stakes.

Little or No Economic Cushion

In contrast, 40% of Americans report financial unpreparedness for an unexpected $400 emergency expense. Half of Americans 55 and older have no retirement savings—a startling figure that requires a rethinking of our retirement infrastructure.

High Returns to Capital, Low Returns to Labor

In the 45 years from 1973 to 2018, inflation-adjusted wages for nonsupervisory workers were flat. Meanwhile, a dollar’s worth of stock grew in real terms to $14.09. Put simply, the value of stock ownership was privileged by orders of magnitude over the value of work.

A Capital Income Cliff

A staggering 97% of all capital income such as dividends, interest, and capital gains are earned by the top 10% of American households. Those below that threshold must rely on labor income alone—an increasingly perilous form of non-diversification as evidenced by precarious job security in the wake of the 2008 financial crisis and now COVID-19.

Persistent Racial & Gender Wealth Gaps

The racial wealth gap compounds an already unsustainably high level of wealth inequality overall. According to the Federal Reserve, the net worth of a typical white family is nearly 10x the average Black household; the average Hispanic household fares only slightly better. The 2008 financial crisis disproportionately harmed communities of color and the impacts of COVID-19 have only deepened racial health and economic disparities. As with race, gender wealth disparities are staggering and far outpace the pay gap. For every dollar of wealth owned by single men, women own only 36 cents. The gender wealth gap is even greater for women of color.