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WashPost: Stock Markets Not That Big a Deal to Americans

WashPost: Stock Markets Not That Big a Deal to Americans
(Richard Drew/AP)

By    |   Monday, 18 December 2017 04:45 PM

The stock market's record highs don't help many Americans, as fewer than 14 percent of households directly own stock in any company, according to a working paper by a New York University economist highlighted in a Washington Post article published Monday.

The Dow Jones rocketed through another milestone in October — hitting 23,000 points — and is poised to hit 25,000 this week while the Nasdaq S&P 500 indexes on Monday topped 7,000 points for the first time in its history. The Dow has spiked more than 4,600 points since President Donald Trump's election, and has notched 66 record highs in that time.

The share of households with direct stock ownership saw a substantial decrease after 2001, a trend that probably reflected "the sharp drop in the stock market from 2000 to 2001, its rather anemic recovery through 2004, its subsequent rebound from 2004 to 2007, and its even sharper fall off from 2007 to 2010," according to NYU economist Edward Wolff.

In 2016, the share of households directly owning stock — 13.9 percent — was similar to the share in the early 90s.

Stock ownership, according to Wolff, is highly concentrated by income class.

"Whereas 93 percent of households in the top 5.2 percent of income recipients (those who earned $250,000 or more) owned stock in 2016, 35 percent of the middle class (incomes between $25,000 and $50,000), 17 percent of the lower middle class (incomes between $15,000 and $25,000), and only 9 percent of poor households (income under $15,000) reported stock ownership."

Wall Street is closely tracking the GOP tax plan, which still has a long way to go before being enacted by Congress, but the framework would cut the corporate tax rate from 35 to 20 percent and encourage U.S. multinational corporations to bring profits overseas back to America.

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The stock market's record highs don't help many Americans, as fewer than 14 percent of households directly own stock in any company, according to a working paper by a New York University economist highlighted in a Washington Post article published Monday.
stock market, americans, impact
299
2017-45-18
Monday, 18 December 2017 04:45 PM
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