U.S. Wealth Gap Rises With Jackson Hole Coming at the Top
Wealth gap between rich and poor is soaring in New York and San Francisco -- and widest in Jackson Hole where Fed meets this week.
(Bloomberg) -- When U.S. Federal Reserve officials head to their annual mountain retreat next week to talk economic inequality, they’ll be sitting in the country’s wealthiest county.
Wyoming’s Teton County, home to Jackson Hole, has the nation’s highest per-capita income from assets, according to a study by the Economic Innovation Group. The analysis found a sharp increase in geographic concentration of asset ownership over the past decades.
Jackson Hole, a rural community near the majestic Grand Teton national park and renowned ski slopes, has attracted the ultra-rich in recent years, pulling away from the rest of the country.
The EIG report, released Wednesday, specifically looked at income from interests, dividends and rents. The gap between counties with the lowest and highest asset income per capita rose sixfold between 1990 and 2019, as income skyrocketed in centers of finance, technology, mining and recreation.
Income from assets -- a measure of wealth that excludes wages and government assistance programs -- make for about a fifth of personal income nationwide.
It’s soared in places like New York City and the San Francisco Bay Area. Meanwhile, across Appalachia, the Deep South and much of the Midwest, it stagnated, representing a negligible source of income.
“I was pretty shocked that so much of the country has derived so little benefit from the boom in asset prices and asset values that we’ve seen over the past couple of decades,” Kenan Fikri, research director at EIG, said in an interview.
Asset ownership offers people something to fall back on during periods of economic uncertainty that could result from unemployment, illness, or, as it has been the case for many Americans over the past year, a pandemic. But for those who live paycheck to paycheck, saving and investing is hardly an option.
Two Cities
New York City epitomizes the concentration of wealth in the past 30 years, resulting in widening racial gaps.
Manhattan, where a majority of residents are White and have a college degree, has seen rapid growth in income from assets in the early 2000s and the 2010s, pulling away from the Bronx, according to the EIG analysis.
As a result, asset income per capita in the world’s financial capital, at about $64,200, is now 13 times that of the neighboring Bronx, where 90% of the population is non-White, the data show.
Nationwide, the county with the lowest asset income per capita is in South Dakota, home to the Pine Ridge Indian Reservation. At $2,800 per person, it’s one-third of the national average. Among the largest U.S. counties, the ones with the five lowest incomes from assets per capita are all mostly Hispanic or Black.
Only a minority of Americans holds assets beyond homes, cars and retirement savings. About 15% of households own stocks and 13% hold business equity or other residential property, according to Fed data.
EIG’s Fikri said that although “the condition of being poor today is better than it was in 1970,” some low-income communities still don’t have access to “avenues for wealth creation.”
Fed officials, economists and central bankers have convened annually at Jackson Hole in August since the 1980s to discuss economic policy. The topic of this year’s gathering is “Macroeconomic Policy in an Uneven Economy,” as the Fed has focused more during the pandemic on the issues of economic inequality.
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