High earnings no longer correlate directly with wealth generation. Wealth building and homeownership depend more on the assets families already own. A growing gap between income and wealth generation contributes to perceptions of unfairness in the economy. Americans report worsening economic sentiment even as Wall Street reaches record highs. Many workers can secure steady jobs but feel locked out of acquiring assets that build wealth. The “bank of mom and dad” effect strengthens when family resources determine access to economic goals. Research uses a dataset of 3.4 million families with wealth and income records to examine these patterns.
"Those that come from wealthier families that are maybe able to achieve those other economic goals-wealth building, homeownership-I think also could play into a sentiment of a sort of unfairness in the economy,"
"In other words, it's increasingly obvious that who your parents are has become a more reliable predictor of your wealth than what you actually do for a living."
"For decades, the American Dream was predicated on the fact that hard work and a decent income would lead to homeownership. But the research finds that high earnings no longer correlate directly with wealth generation. Rather, it matters more so today what assets your family owns."
"Even as Wall Street hits successive record highs, Americans are feeling worse and worse about the economy. An April Ipsos poll found that 61% of Americans today feel the economy is on the wrong track. Meanwhile, the May consumer sentiment index hit the lowest level since the University of Michigan started tracking the metric in 1952, lower than during the COVID pandemic and aftermath of the Great Recession."
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]