Wealth in the US grew the fastest, likely due to the impact of pandemic stimulus under Trump and Biden. Wealth among minorities shot up in particular, mostly concentrated in housing.
Over the last two years, pandemic aid has helped many Americans who were struggling to pay their bills — and overall, stimulus funding has given them the biggest boost they’ve likely ever gotten.
According to Credit Suisse’s new Global Wealth Report, both financial wealth — liquid cash ready to spend — and non-financial wealth — assets such as housing — will reach new highs in 2021. When year-on-year exchange rate movements are taken into account, average wealth increased by 11.3% in 2021, while total global wealth increased by 12.7%. According to the report, it is the fastest rate achieved this century and “almost certainly the fastest rate recorded at any time in history.”
These figures are even higher for Americans and Canadians, who experienced the greatest change in wealth of any region studied, with a 14.7% increase in wealth per adult.
According to the researchers, the US has been gaining ground fairly consistently, and exceeded expectations in 2021 by adding $19.5 trillion to its household wealth — well ahead of China in second place at $11.2 trillion and Canada in third place at $1.8 trillion.
In March 2021, Democrats passed a $1.9 trillion stimulus bill with no Republican support. It injected money into nearly every sector of the economy, including individuals, health care providers, and state and local governments. It specifically distributed $1,400 direct payments to the majority of Americans in conjunction with a $300 federal increase to unemployment insurance. This is in addition to former President Donald Trump’s stimulus funding, which included a $900 billion bipartisan package in late 2020. This rescue package included $600 stimulus checks, federal unemployment assistance, food, and rental assistance.
The report noted that early pandemic unemployment primarily impacted women, young adults, and minorities, but that employment rates and labor earnings have mostly recovered in high and middle-income countries such as the United States.
People of color, in particular, experienced an increase in wealth between 2019 and 2021. Black Americans and Hispanics grew by 22.2% and 19.9%, respectively, compared to 12.7% for non-Hispanic Caucasians. According to the researchers, this is due to increases in non-financial wealth, specifically real estate.
“The overall wealth picture has been positive,” the researchers said, “even for disadvantaged subgroups.”
The report follows other data from recent years that show that stimulus aid had a significant impact on the savings Americans were able to accumulate during the pandemic. Even those who struggled to find work or keep their businesses afloat could rely on government assistance to get by and, in some cases, get ahead. For example, the poverty rate fell to 7.8% in 2021, the lowest level on record. According to a recent Census Bureau report, this is largely due to federal assistance last year. But that’s likely to be the most help Americans will be getting in a while, the report notes.
“The massive business and income support programs undertaken in response to the macroeconomic setbacks, together with extra health-related expenditures, drove public debt up to record levels outside of wartime,” the researchers said. “Future government actions aimed at redressing this situation may well affect wealth creation.”