Trump and Biden's pandemic stimulus helped Americans get wealthier at the fastest rate this century
AP
- Global wealth increased at its fastest rate this century last year.
- 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.
Pandemic aid over the past two years helped buoy many Americans who were struggling to pay their bills — and overall, stimulus funding has given them the biggest boost they've gotten, likely ever.
That's according to Credit Suisse's new Global Wealth Report, which found that both financial wealth — liquid cash ready to be spent — and non-financial wealth — assets such as housing — grew by record highs worldwide in 2021. When year-on-year exchange rate movements are accounted for, average wealth grew by 11.3%, the researchers found, and total global wealth grew by 12.7% in 2021. It's the fastest rate achieved this century, the report said, and "almost certainly the fastest rate recorded at any time in history."
Those numbers are even higher for Americans and Canadians, who clocked the highest change in wealth out of all the regions documented, seeing about a 14.7% increase in wealth per adult.
The US has been gaining ground fairly regularly, the researchers said, and exceeded expectations in 2021 by adding $19.5 trillion to its household wealth — well above China in second place at $11.2 trillion and Canada in third at $1.8 trillion.
Democrats approved the $1.9 trillion stimulus law without any Republican support in March 2021. It pumped cash into nearly every sector of the economy ranging from individuals, health providers and state and local governments. In particular, it distributed $1,400 direct payments for most Americans in conjunction with a $300 federal boost to unemployment insurance. That's in addition to the stimulus funding implemented under former President Donald Trump, which included a $900 billion bipartisan package in late 2020. That rescue package contained $600 stimulus checks, federal unemployment aid, food and rental assistance.
The report noted that unemployment hits at the beginning of the pandemic mostly 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 US.
And people of color in particular saw a surge in wealth between 2019 and 2021. The 2021 growth was much higher for Black Americans and Hispanics at 22.2% and 19.9%, respectively, than for non-Hispanic Caucasians at 12.7%. The researchers said this is due to increases in non-financial wealth, particularly real estate.
"The general wealth picture has been positive, even for disadvantaged subgroups," the researchers said.
The report comes on the heels of other data from the past few years showing that stimulus aid has had a huge influence on the savings Americans have been able to accrue during the pandemic. Even those who struggled to find work or keep their businesses from going under were able to rely on government benefits to get by and, in some cases, get ahead. The poverty rate fell to 7.8% in 2021, the lowest level on record, for instance. That's largely due to federal assistance last year, according to a recent report from the Census Bureau.
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."