What is wealth? Hint: It’s not just for the rich
Marketplace's Wealth and Poverty reporters talked with people from all over the country, and many, regardless of their earning power, had very little in the way of savings.
David Brancaccio: Today, Marketplace is launching a brand new beat. The Wealth and Poverty Desk will explore the growing concentration of wealth in the United States and its causes and consequences.
Quite a mouthful. So we're taking it a bite at a time. In the first of our stories about "The Fundamentals" of wealth and poverty, Marketplace's Mitchell Hartman says "wealth" is about more than just the dollars in your paycheck.
Mitchell Hartman: Nicole Lewis is 24. She lives in a spacious one-bedroom apartment in Brooklyn on her modest salary at a New York nonprofit. She doesn't have a trust fund. But wealth is all around her. Always has been.
Nicole Lewis: My great-grandmother was the first black woman to graduate from University of Pennsylvania Law School, the first to be appointed to the Pennsylvania Bar.
The family made money, in law and business. Now, they’re in the top 1 percent. Lewis has gone to the best schools.
Lewis: And I’m excited to break into the food world in New York City, which is a really tough, tough place to break into. It’s all about who you know.
So she picks up the phone, calls her aunt.
Lewis: She goes, 'Great, we have a mutual friend, I’ll reach out, I’ll put you in touch.'
With celebrity chef Marcus Samuelsson of Red Rooster restaurant, Harlem. Now Lewis has an internship at the top of the food chain.
Lewis: And that ties into the way that I think about wealth and what it’s meant. It’s been more about entrance or acceptance into a specific social network.
Right place, right time, right people: wealth lubricates the path to career and financial success for the rich. For the middle class, wealth is most important for the material boost it can provide to the younger generation.
Thomas Shapiro: By giving financial assistance, for example, when they buy their first home.
That’s Thomas Shapiro of the Institute on Assets and Social Policy at Brandeis. He says the biggest asset most families have isn’t a stock portfolio or a business, but a house. Over time, the equity can be used for college, retirement, surviving job loss or a bad accident.
Shapiro: Wealth is surplus security.
Shapiro: Think about everything that has value that you could possibly sell, minus everything that you owe.
If that calculation puts you in the red, you don’t have any surplus security at all. Turns out, one in four American families have so little net wealth, they couldn’t survive without income for three months -- at the poverty line. They’re living with virtually no financial guardrail between themselves and destitution.
I’m Mitchell Hartman for Marketplace.