This from Bloomberg :
Asset Income Is a Growing Source of Wealth — and of Geographic Inequality
Income inequality is often measured by wages alo
ne. But looking at wealth generated from assets across the U.S. reveals immense geographic disparity.
By Tony Frangie Mawad
30 August 2021, 10:40 pm GMT+8
A home in Jackson Hole, Wyoming. Surrounding Teton County has the highest asset income per capita.
A home in Jackson Hole, Wyoming. Surrounding Teton County has the highest asset income per capita. Photographer: Richer Images/Construction Photography/AvalonAvalon/Hulton Archive
Income inequality in the U.S. is usually measured by wages, but that’s far from the only way Americans accumulate more wealth. Income from assets — like stocks, rental properties and interest — now makes up one-fifth of total personal income in the U.S. Yet most Americans have few assets besides their primary residence and retirement account, and even those are usually out of reach for low-income workers.
The accumulation of asset wealth is concentrated geographically, and the divide between counties with and without significant income from assets has grown exponentially, according to a new report by the Inclusive Wealth Building Initiative from the DC-based Economic Innovation Group.
Between 1969 and 1990, the gap between the top and the bottom U.S. counties by average asset income doubled — and then increased sixfold between 1990 and 2019, the report finds. The researchers use data from the Bureau of Economic Analysis and the Internal Revenue Service to measure asset income by county and better understand “asset poverty,” a concept that has not been well understood.
“Over the past few decades, asset income has skyrocketed in many of the country’s most prosperous places even as it stagnated for the bottom 90 percent of counties,” reads an interactive map that accompanies the report. This has perpetuated a growing divide between what the researchers describe as “wealthy enclaves” and “asset deserts.”
relates to Asset Income Is a Growing Source of Wealth — and of Geographic Inequality
The darker the color, the more assets per capita a county has. Credit: Economic Innovation Group
Asset-based income is usually concentrated in counties that are centers of finance, mining, technology and recreational destinations. But it’s scarce in the remainder of counties.
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“As our economy has been financialized we’ve seen the returns of holding assets increase substantially over the past couple of decades,” says Kenan Fikri, research director of the Economic Innovation Group. The rise of the digital economy and the loosening of monetary policy exacerbated this process, says Fikri, allowing asset-holders to enjoy greater income and “super returns in technology companies.”
On a per capita basis, asset holdings are almost nonexistent across much of Appalachia, the Midwest and the Deep South. Meanwhile, the Mountain West has some of the greatest inequality in asset income. For example, Teton County in Wyoming, home of the Jackson Hole ski area, has the highest asset income per capita in the U.S. at $164,400, while neighboring Uinta County has just a $7,100 per capita income.
This wealth gap is also enormous in metropolitan areas, as the income of tech and finance hubs skyrockets. For example, in New York City, the median household income of Manhattan is more than double that of the neighboring Bronx borough. There is also a racial wealth gap that exists within Manhattan: Most zip codes that have exceptionally high dividends — clustered around Central Park — are majority white, with some split between white and Asian. Meanwhile, zip codes that are majority Black or Hispanic — clustered in and above Harlem — are below the national average for dividends per capita.
These disparities persist throughout the country. Minority, working-class and recent-immigrant counties are asset poor. Among the 100 most populous counties, the 15 with the highest asset incomes are majority white, and more than half of residents in these counties have at least a bachelor’s degree. Conversely, the 15 counties with the lowest asset income are majority non-white and only 25% of its residents have bachelor’s degrees.
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Within this unequal panorama, the most common financial assets of American households are retirement saving accounts such as 401(k)s. Yet, these systems leave out “a large fraction of the bottom half of the workforce,” including people in service industries, hourly jobs and other sectors where employer-sponsored retirement plans are rare, explains Fikri. This leaves low-income workers with few tools to build wealth and ensure their own financial security.
The disparities also exacerbate the tax advantages that professional and upper-class professionals get from the 401(k) system, says Fikri, and can particularly disadvantage Black Americans.
To democratize access to assets, the Inclusive Wealth Building Initiative has proposed expanding access to a retirement savings plan modeled after the federal Thrift Savings Plan in which the federal government would match the contributions of low-income workers without access to an employer-provided plan. This plan could enable a worker earning $30,000 a year to retire with nearly $600,000 by saving 5% of their salary over 40 years.
The proposal has drawn support from both liberal and conservative economists: It was developed by conservative economist Kevin Hassett, the former chairman of the Council of Economic Advisors during the Trump administration, and Teresa Ghilarducci, a labor economist from the progressive-leaning New School.
“It’s one idea that would further equity,” says Fikri, “and help more people build wealth and have stakes in the economy.”
About time, but it's only a ripple! If Western governments do not act soon, these parasites will end up devouring what remains of their rotting societies...
Karen Maley at the AFR is a finer logician than Soros... But I still think that the Magyar billionaire is the more consistent of the two. Now, THIS is a proper "Catch-22" situation (people always mistake it for a simple dilemma or for a vicious circle). It is NOT the case that Xi wants "capitalism" to serve the State! Rather, Xi KNOWS that Western states use "capitalism" to impose THEIR will! Maley's mistake is to believe that capitalism is a "market mechanism" INDEPENDENT OF the State. But BOTH Xi and Soros know that this is NOT the case... Except that Soros is a hypocrite or a liar and Xi is not.
Maley is the mad soldier who wants to keep fighting. Xi and Soros are the sane soldiers who want to rort capitalism for different end-goals! Xi feigns support for capitalism but knows it is a Western political tool. Soros knows this, too, but PRETENDS that it is not a political tool!
Maley neither knows nor pretends: she BELIEVES!
In Corriere today :
" L’Europa è da decenni un continente specializzato nell’arte di «salvare la pace» ricorrendo esclusivamente alla diplomazia. Non c’è Paese europeo che esiti al cospetto della prospettiva di mediare, interloquire e dialogare. Meglio se con i regimi più illiberali della terra. È l’unica cosa che sappiamo fare. Nei giorni del lutto si versano lacrime e si alza la voce. Poi si torna immediatamente a mediare, interloquire, dialogare. Il che può apparire positivo a fronte di grandi sconvolgimenti come quelli di questi giorni. Ma non è detto che un insieme di 27 Paesi mediatori — talvolta in ordine sparso — del tutto incapaci di far valere, neanche in casi estremi, la forza, sia in grado di dar vita ad un mondo più pacificato di quello che ci lasciamo alle spalle."