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Dow Breaks Record, But Middle Class Missing Out

A look at what the Dow’s recent 16,000 benchmark really means for Americans.

Credit: Scotch Plains Patch
Credit: Scotch Plains Patch

Once a day, Patch tackles national news that affects your community. If you have suggestions for tomorrow’s story, email catherine.crawford@patch.com.

Monday saw the Dow Jones Industrial Average cross 16,000 for the first time in history, but you might be surprised by how few people feel the effects of a stock market surge.

A recent Gallup poll indicates that fewer and fewer Americans are investing in the stock market, and the percentage of Americans buying stock is the smallest it’s been since 1998. That, in turn, can make income inequality worse.

The Gallup results show that Americans in their 30s and 40s, as well as those in the middle income bracket, exhibit the largest drop in stock ownership. Jia Lynn Yang writes for The Washington Post that, “As the stock market rises, some shareholders may feel wealthier, which could encourage them to spend more. But that’s hardly a feeling that’s broadly shared.”

For an extreme anecdotal example of what this looks like, you can look at Wal-Mart: The company’s stock is way up since the beginning of the year, while at the same time employees at one of its stores are holding a canned food drive for struggling coworkers.

With the unemployment rate stuck above 7 percent, stagnant wages, and the threat of a depression still hovering, many Americans may decide they simply cannot afford to invest.

What do you think explains the growing inequality in America? Tell us in the comments or in a blog post.



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