America's income gap shrunk throughout the pandemic, but inflation means it 'may be nothing but fleeting,' an expert says

Since the beginning of the Pandemic, the income gap between the bottom and top half of households in the US has shrunk.

According to the Federal Reserve, the bottom half of households had a net worth of less than $166,000.

Half of households now hold a collective $3.73 trillion of the nation's wealth, which is double as much as 2020 and ten times as much as 2011.

The bottom half has held the highest net worth for more than two decades.

Regional cost of living differences, such as gas costs topping $8 in Los Angeles compared to the national average of $5, are not taken into account in the data. Black households made up just 4.4% of the total at the start of the year.

According to Brian Marks, a professor in the Economics department at the University of New Haven, there's an issue about disposable income and the cost of living.

According to Forbes, inflation is the highest it has been in 40 years. Inflation has risen in the last year according to a report.

Marks, who was appointed by President Ronald Reagan's administration to the Commodity Futures Trading Commission, said inflation on key goods such as housing, energy, and food is a "stealth tax, but unfortunately in this environment, it's not too stealthy."

Madison Hoff/Insider

The lower half of the population had improved their wealth because of what was happening in the environment. We're moving into this new phase of recovery, but we're facing supply chain crises, which are putting upward pressure on pricing because of demand." Those gains might be dissipated.

The child tax credit is one of the reasons for the increase in wealth for the bottom half of the US population.

Marks believes that the income inequality gap may widen again now that payments have stopped and the cost of goods is increasing.

"Unfortunately, this improvement may be nothing but fleeting, as all these programs come to an end, and we're seeing what's happening with pricing," he said.

It's a progressive tax that's really going to hit hard as we move forward, Marks told Insider, adding that "every time we go to the gas station, every time we go to the grocery store, it's a progressive tax that's really going to hit hard

Changes in policy are the only way to help the bottom 50% gain and maintain wealth, according to a French economist.

The bottom half of the population have never owned anything substantial. Some people say that we should wait for growth to spread the wealth, but this makes little sense in light of historical evidence. The bottom half of the wealth share has always been less than 5%. This is a huge injustice for the bottom half of the population and a huge loss of mobility.