Generation Xers are emerging from the pandemic more wealthy and economically stable compared to other generations, specifically millennials.
Reuters first reported this along with data collected by the U.S. Federal Reserve showing that members of Generation X saw their wealth jump more during Donald Trump’s presidential term and through the coronavirus pandemic. Generation Xers can be defined as those currently between the ages of 40 and 55; they come after the Baby Boomer generation, and right before Generation Y, also known as Millennials.
Generation X hit a major turning point last year when its share of wealth, at 26.9 percent, passed its share of households which is 26.8 percent. But what does this mean? This means that Generation X’s wealth has surpassed the amount of households they account for in our population. Reuters coined Generation X as the ascendant generation because of this.
When Trump took over as president in 2017, Generation Xers accounted for 34.6 million households, and their wealth sat at 17.4 percent. That wealth jumped to 25.4 percent by the end of 2019, so it was clear to see that Generation X was on a steady climb. While Baby Boomers account for only 33 percent of households right now, members in this generation still hold 52.7 percent of U.S. household net worth. It may seem like Boomers are sitting pretty, but that net worth figure was up to 55.8 percent toward the end of 2016, and Reuters predicts that this generation’s wealth will continue to drop as other generations rise up.
Unfortunately, Millennials aren’t doing as well as their counterparts. This generation encompasses members between the ages of 24 and 39 as of the end of last year. Millennials own less than 5 percent of U.S. household net worth, but account for roughly 30 percent of households.
Overall, the Federal Reserve’s data shows that wealth in America changed drastically last year due to factors like swinging stock prices, a strong housing market and how federal pandemic-related financial aid was distributed. The data also shows that rich households continued to expand their wealth while others struggled. By the end of 2020, the top 1 percent or 1.29 million households, added $4 trillion to their wealth and this group owns 31.4 percent of stocks and real estate assets. The bottom 50 percent of households saw a slight increase in net worth from 1.8 percent to 2 percent, which is still incomparable to the wealth pouring into that top 1 percent.
One of the most eye-opening stats found from this data is that there was little to no progress made in narrowing wealth inequality. This should come as a surprise since American businesses have put a bigger spotlight on amplifying minorities in this past year.
On the plus side, Black and Hispanic people slightly narrowed the gap between their shares of net worth and households, but the gap is still large. Black households started the pandemic with 4 percent of household net worth, and accounted for 14 percent of households. A year later and the Black population now accounts for 4.1 percent of household net worth. Progress was stagnant for Hispanics, who account for 9.3 percent of households and 2.4 percent of household net worth.
Still, Black and Hispanic people are not bringing in nearly as much as their white counterparts. White households’ net worth is about four and a half times that of the average Black family, and five times that of the average Hispanic family, Reuters found.
Check out the Federal Reserve data used here.