Life has never been so good for millions of Americans

This is an era of great political division and cultural upheaval. Much more quietly, it has been a time of vast financial advantage for large numbers of Americans.

For the 158 million who are employed, the prospects are not so good since man walked on the moon. Approximately half of these workers have retirement accounts that have been fattened by a prolonged rally in the stock market.

There are 83 million owner-occupied homes in the United States. At the rate at which their value has increased, many of them are actually vaults within which families live.

This boom is not celebrated much. It was a slow-building phenomenon in a country where the news gets old in a few hours. It took place during a period of fascination with the schemes of the truly rich (Musk, Elon) and against a backdrop of growing inequality.

If you haven’t been able to buy a home because of skyrocketing prices, the rising value of homeowners’ wealth is no comfort.

The faltering stock market could be a sign that the boom is ending. A slowing economy, renewed inflation, high gas prices and rising interest rates can undermine the gains made over the years.

But for now, this flood of wealth is quietly redefining retirement, helping to fuel Silicon Valley and stoking a leisure and entertainment boom. It is increasing corporate profits by unprecedented amounts, while giving almost everyone the feeling that a better job may be within reach.

Workers resign voluntarily

More than 4.5 million workers voluntarily resigned in March, the highest number since the government began recording this statistic in 2000, the Bureau of Labor Statistics said. A few years ago, the monthly total was between 3 million and 3.5 million.

“Maybe it’s easier to focus on the negative, but a lot of people, maybe 40 million families, are doing very well,” said Dean Baker, an economist who co-founded the liberal-leaning Center for Economic and Policy Research.

“You’d have to go back to the late 1990s to find a similar time. Before that, to the 1960s.”

This widespread wealth sheds light on why the number of workers who say they expect to work beyond age 60 has dropped below 50% for the first time. She is responsible for the abundance of $1 billion startups known as unicorns — more than 1,000 today, up from around 200 in 2015.

She offers a reason for the increased interest in unionizing workers at companies from Amazon to Apple to Starbucks, as hourly workers seek to claim their share. And it helps explain why Dwight and Denise Makinson have just returned from a 12-day trip to Germany.

“Our net worth has reached the millionaire level because of our investments, which were unpredictable when we got married 40 years ago,” said Dwight Makinson, 76, a retired US Forest Service.

The couple, who live in Coeur d’Alene (Idaho), have company. There are 22 million millionaires in the US, estimates Credit Suisse, up from less than 15 million in 2014.

“I used discount coupons to buy things. One of my daughters would say, ‘Mom, this is embarrassing,'” said Denise Makinson, 66, a nurse. “But we believed in savings. Now she uses coupons too.”

Every economic transaction has several sides. In 2000, no one found house prices especially cheap. But over the past six years, prices have risen on the total value of all homes in 2000, according to the Case-Schiller index. In many areas of the US, it has become virtually impossible for tenants to buy a home.

This is fragmenting society. Even though the overall home ownership rate rose in 2020 to 65.5%, the rate for black Americans lagged severely: 43.4%, down from 44.2% in 2010. The rate for Hispanics is just slightly better.

This disparity may explain the reduced sense of accomplishment. “It’s a time of prosperity, a time of plenty, but it doesn’t feel like that,” said Andy Walden, vice president of business research at Black Knight, which analyzes financial data.

Consumer confidence drops

Even for those doing well, the economy looks precarious. The venerable University of Michigan Consumer Sentiment Index fell in March to the same levels as in 1979, when the inflation rate was 11%, before rising in April.

The initial coronavirus outbreak ended the longest US economic expansion in modern history after 128 months. Then began a drastic fall. The federal government intervened, handing out money generously. Consumption habits have changed because people have stayed at home. The recession ended after two months and growth resumed.

Federal Reserve Chairman Jerome Powell recently warned that there were too many employers looking for too few workers, saying the job market is “tight to an unhealthy level.” But for workers it is rewarding to have the upper hand when looking for a new job or profession.

“Both my husband and I were able to make job changes that doubled our income from five years ago,” said Lindsay Bernhagen, 39, who lives in Stevens Point, Wisconsin and works at a startup. “Looks like it was mostly luck.”

A decade ago, the housing market was in chaos. From 2007 to 2015, more than 7 million homes were lost to foreclosure, according to Black Knight. Some of these were speculative purchases or second homes, but many were primary homes. Incited by creditors, people lived in houses they could not easily afford.

Today the opposite is true. People own far more homes than they used to, while banks own less. This acts as a shield against foreclosures, which in 2019 were just 144,000, according to Black Knight. (During the pandemic, foreclosures ceased primarily due to defaults.)

Capital available to homeowners reached nearly $10 trillion at the end of 2021, double what it was at the height of the 2006 bubble, according to Black Knight. For the average American who owns mortgages, that equates to $185,000 before hitting the #loan-to-value pitfalls. The number rose by $48,000 in a year — about what the average American family earns annually, by some estimates.

Those who take a boom for granted are often overshadowed by reality. In May 2000, entrepreneur Kurt Andersen said that raising money for a media startup called Inside was as easy as “getting laid in 1969.” This was a few weeks after the stock market peaked. Seventeen months and a merger later, Inside closed. (Andersen clarified in an email that he only had sex in the 1970s.)

In 2000, the startup slowdown was the first sign of broader economic troubles. This time, it could simply be that people are doing really well. “American families in the best shape in 30 years…but does it matter?” asked Deutsche Bank in a research note last month.

Their logic: families have more money than debt for the first time in decades, which is good in theory. But all that money is encouraging spending, which drives inflation, which forces the Fed to raise interest rates. The result: a recession at the end of next year.

Translated by Luiz Roberto M. Gonçalves