By Alex Tanzi
The extra wealth created in the U.S. during the pandemic flowed overwhelmingly to households headed by a college graduate, according to the latest data from the Federal Reserve.
Those households have seen their net worth surge by $23.4 trillion since the end of 2019, Fed data show. That’s almost three times as much as the wealth accumulated by households headed by someone without a college degree — which make up a majority of the country’s population.
Wealth gaps linked to education levels have become increasingly prominent in the U.S. as the labor market skewed toward higher-skilled work, exacerbating political divisions and complicating policy debates.
The share of adult Americans with a bachelor’s degree or higher has risen sharply in the past few decades. Still, only 38% of all households are headed by someone who completed a college degree. They held a total of $101 trillion in wealth at the end of 2021, compared with $41 trillion for the larger non-college segment.
As of the end of 2021, 9.6% of U.S. households were headed by someone lacking a high-school degree — and those households saw their share of the national wealth shrink to a record low of 1.5%, down from about 10% in the late 1980s.
The initial impact of the pandemic on labor markets tended to reinforce such trends. Over the last two years, payrolls in professional and business services, for example, have increased by more than 800,000 and in finance by 60,000. Meanwhile there are 736,000 fewer jobs in leisure and hospitality.
The latest employment report, though, suggests that less-educated and lower-income workers are seeing faster wage gains in a tight labor market. In leisure and hospitality, pay was up by 11.8% on average in March, compared with a year earlier.