For millions in U.S., the good times are right now
Retirement accounts are fat and home ownership is up
NEW YORK » This is an era of great political division and dramatic cultural upheaval. Much more quietly, it has been a time of great financial reward for a large number of Americans.
For the 158 million who are employed, prospects have not been this bright since men landed on the moon. As many as half of those workers have retirement accounts that were fattened by a prolonged bull market in stocks. There are 83 million owner-occupied homes in the United States. At the rate they have been increasing in value, a lot of them are in effect a giant piggy bank that families live inside.
This boom does not get celebrated much. It was a slow-build phenomenon in a country where news is stale within hours. It has happened during a time of fascination with the schemes of the truly wealthy (see: Musk, Elon) and against a backdrop of increased inequality. If you were unable to buy a house because of spiraling prices, the soaring amount of homeowners’ equity is not a comfort.
The queasy stock market might be signaling that the boom is ending. A slowing economy, renewed inflation, high gas prices and rising interest rates could all undermine the gains achieved over the years. But for the moment, this flood of wealth is quietly redefining retirement, helping fuel Silicon Valley and stoking a boom in leisure and entertainment. It is boosting corporate profits by unprecedented amounts while also giving just about everyone the notion that a better job might be within reach.
More than 4.5 million workers voluntarily quit in
March, the highest number since the government started keeping this statistic in 2000, the Bureau of Labor Statistics reported last week. A few years ago, the monthly total was between 3 million and 3.5 million. “Maybe it’s easier to focus on the negative, but a huge number of people, maybe 40 million households, have been doing pretty well,” said Dean Baker, an economist who was a co-founder of the liberal-leaning Center for Economic and Policy Research. “You’d have to go back to the late 1990s to find a similar era. Before that, the 1960s.”
This widespread wealth throws light on why the number of workers who say they expect to be working past their early 60s has fallen below 50% for the first time. It accounts for the abundance of $1 billion startups known as unicorns — more than 1,000 now, up from about 200 in 2015. It offers a reason for the rise in interest in unionizing companies as hourly workers seek to claim their share.
And it helps explain why Dwight and Denise Makinson just returned from a 12-day cruise through Germany.
“Our net worth has reached the millionaire level due to our investments, which was unfathomable when we were married 40 years ago,” said Dwight Makinson, 76, who is retired from the U.S. Forest Service. The couple, who live in Coeur d’Alene, Idaho, have company. There are 22 million U.S. millionaires, Credit Suisse estimates, up from fewer than 15 million in 2014.
“I used coupons to buy things. One of my daughters would say, ‘Mom, that’s so embarrassing,’” said Denise Makinson, 66, a registered nurse. “But we believed in saving. Now she uses coupons, too.”
Every economic transaction has several sides. No one thought home prices in 2000 were particularly cheap. But in the last six years, prices have risen by the total value of all housing in 2000, according to the Case-Schiller index. This is fracturing society. Even as the overall homeownership rate in 2020 rose to 65.5%, the rate for Black Americans has severely lagged. At 43.4%, it is lower than the 44.2% in 2010. The rate for Hispanics is only marginally better.
That disparity might account for the muted sense of achievement.
“It’s a time of prosperity, a time of abundance, and yet it doesn’t seem that way,” said Andy Walden, vice president of enterprise research at Black Knight, which analyzes financial data.