As I write this, the Dow Jones Industrial Average, the premier barometer of Wall Street and the “health” of the American economy, is on a tear. And this makes Donald Trump and the relatively small numbers of American population who are wealthy and are heavily invested in the stock market very, very happy. But what about average, everyday Americans?
According to a Gallup poll conducted in March and April, 55% of Americans reported that they own stock. A high percentage of that stock ownership is from people like me, whose money is invested in retirement savings accounts, like their employer-based 401(k) or IRA accounts. But according to Goldman Sachs, the richest one percent of Americans account for more than half the value of equities owned by U.S. households.
Stock ownership is strongly correlated with household income, formal education, age, and race. It’s much higher among older, more highly educated whites earning more than $100,000 annually than it is among blacks, Hispanics, and the non-college educated.
So yes, a segment of the population is thrilled with the way that Wall Street has bounced back. But what about Main Street America? Are Wall Street and Main Street out of touch?
Wall Street investors are are excited and optimistic simply because they see progress in the reopening of our economy. Yet the continuing health crisis from COVID-19 has killed almost 110,000 Americans and there is no let-up in sight. There is record-high unemployment. Civil rights demonstrations (some violent) have been occurring across the nation. And the president is threatening to use the military against American citizens using their First Amendment right to assemble and demonstrate.
So there does seem to be yet another divide in America. Not the race divide, not the income divide. Not the political divide. But the divide that has a little bit of all of that: the divide between Wall Street and Main Street.