5 Steps For Creating a Content Marketing Strategy That Drives Business Results

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Here are five crucial steps your brand should take to create a content marketing strategy that grows your business and drives results. “Never ask for anything, and especially from those who are stronger than you. They’ll make the offer themselves, and give it of their own accord” — that’s one popular quote from Mikhail Bulgakov’s book, The Master and Margarita.

Even though Bulgakov didn’t mean that in the context of , that’s a generally good rule. Content marketing is one thing that provides the most inbound requests. In other words, make people come to you first and offer themselves.

According to , 78% of companies with a documented produced effective, meaningful content. Content marketing generates over three times as many leads as outbound marketing and costs 62% less. However, it’s essential to ensure your is creating content that’s useful to your customers and able to further your company’s long-term goals.

There’s an overwhelming amount of content available in digital spaces, so here are five crucial steps your brand should take to create a content marketing strategy that drives results:

Related: 4 Simple Steps to Creating an Effective Content Marketing Strategy

1. Figure out your narrative

The most memorable and successful brands have one thing in common: They tell an engaging, consistent story. Storytelling is the heart of a great content marketing strategy, so investing the time and resources necessary to perfect this aspect of your business is important.

Psychology Today notes that stories help humans increase feelings of empathy by releasing the “happy” chemical oxytocin and reducing the stress hormone cortisol. The right story still sparks that primal part of the human psyche that engages our emotions and fosters a sense of meaningful connection to each other and the brand telling the story. In essence, stories are how we think and assign meaning to our lives.

Anyone can create a meaningful story around their product or service, and 92% of consumers say they want to see ads that feel like a story. is a notable example of this. Buying furniture isn’t exactly the most exciting task. However, customers are incredibly loyal to Ikea, not because of their quality or prices, but because they’ve created an immersive narrative around experiencing the aspirational joy of designing your home with simple, elegant pieces that reflect who you are.

2. Research your target audience and channels

Before creating a compelling narrative, you must know to whom you’re telling the story. Generating leads and traffic is consistently one of the most challenging aspects of marketing, which is why it’s essential to research your target audience thoroughly.

Create an avatar of your ideal customer, and spend time fleshing out this person’s backstory. What’s their age? Gender? Average income? What kinds of careers might this person want? What do they do for fun? What type of personality do they have? The more three-dimensional you can make this avatar, the more intimately you can understand your target audience.

For an example of how this is done right, scroll through MoonPie’s Twitter. They have perfected their brand voice to reflect their target audience: Someone who enjoys quirky humor and doesn’t take themselves too seriously. As a result, they’re highly relatable to their audience and facilitate engagement in a seemingly effortless manner.

Related: To Reach Your Target Audience, You Need to Use These 5 Steps

3. Generate content ideas

Did you know that, on average, 35% of companies have zero dedicated content marketing personnel? This means that it’s hard to come up with consistently fresh content and stay on top of trends. Tools like UberSuggest, Google Trends and Buzzsumo are all great ways to maximize your content generation ideas when you don’t have a dedicated team, but there are other things your brand can do as well.

Depending on your goals and audience, there are plenty of ways to generate eye-catching, shareable content ideas. You can set up trend alerts on platforms like Instagram and to capitalize on viral videos and memes, or you can even turn to your user base to create a user-driven campaign.

Neutrogena is an example of a successful user-generated content campaign with their Neutrogena Studios platform. For this, they’ve allowed customers to create video content submissions focused on skin health. Not only does this utilize brand loyalty and provide an evergreen source of marketing content, but it also requires minimal resources for a great ROI.

4. Decide on distribution

No matter how great your content is, your time and resources are ultimately wasted if you can’t get it in front of the right audience. From ebooks, blogs and podcasts to graphics and webinars, there are countless ways to distribute your content.

Which channels you choose will depend on your goals and target audience. However, there are three main channels: paid (e.g., Instagram ads), owned (e.g., email newsletters) and earned (e.g., social media shares). In most cases, a successful content distribution strategy will be some combination of all three channels.

The optimal distribution strategy comes after defining your target audience and figuring out your narrative. These two steps inform the types of content you’ll focus on, which helps you determine the best channels for getting your content seen and shared.

A key component of distribution is ensuring your owned channels are optimized, because this is the avenue you have the most control over. Oracle Vitrue’s “Like Can Never Replace Love” campaign saw massive success because the company emphasized promotion through its owned distribution channels (e.g., staff, partners, influencers and customers).

Related: 4 Content Marketing Strategies to Boost Your Business

5. Measure your results

Every content marketing strategy needs goals and measurable KPIs to determine whether or not a campaign was effective. KPIs like content impact, engagement, traffic and sentiment are great starting points. Still, these can be further divided into more nuanced metrics like unique page views, conversions, top exits, bounce rates and social shares. Remember that the metrics will differ for each distribution channel, and understand that figuring out the proper baselines and metrics for your brand will likely take time (and some adjustment).

In the case of Casper, a sleep startup that has built its brand on content marketing, those metrics could be features in top-tier magazines that entail recognition among a broader audience. Despite its financial problems afterward, Casper had first grown rapidly, generating $30 million in revenue and expanding its team from five to hundreds of people in less than a year.

The company was featured as one of the most innovative companies by Fast Company in both 2016 and 2017. “The brand made a splash on social media, releasing a series of creative Snapchat and Instagram stories,” they wrote. Casper also hired journalists and announced the launch of its own editorial venture focused on all aspects of sleep. So, no matter what, Casper has its own identity and a foothold in brand history.

Related: How to Craft a Content-Marketing Strategy That Works

Remember that your content should be emotionally compelling and purposeful. Great content marketing strategies allow brands to establish genuine connections with their audience. Don’t be afraid to explore what will work best for your brand and try different options. Ultimately, it’s essential to recognize that content marketing strategies are dynamic, ongoing processes that will shift and change over time. So, it’s wise to start dedicating time and resources toward it now to get a jumpstart on the future.

Source: 5 Steps for Creating a Content Marketing Strategy That Drives Business Results

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5 Reasons Why Property Stocks Remain Attractive

It’s a well-known fact that Singaporeans love property. Before the pandemic, it was common to hear of hordes of people thronging condominium showrooms where units are snapped up like hotcakes.

While the pandemic has eliminated these throngs, the property market continues to remain buoyant. Last month, 99.co and SRX reported that condominium resale prices climbed for the 15th consecutive month, hitting a new all-time high.

The rental markets for HDB flats and private property also benefitted from Singapore’s economic recovery, with condominium rents climbing by 9.1% year on year in October. But it’s not all good news for investors. 

Physical property requires heavy upfront capital and constant upkeep. Property-related stocks, on the other hand, offer an alternative, acting as a proxy for owning physical capital and can easily be accessed through the stock market.

REITs and property stocks are breathing a sigh of relief as economic activity picks up. As an investor, you may wish to take a second look at property-related stocks as they offer some compelling characteristics. Here are five reasons why they are attractive.

1. A scarce resource

No matter how you cut it, land is a scarce resource in our tiny island. That’s the reason why the government has been trying to maximise the space by building higher and increasing the plot ratio for properties. Property developers such as CapitaLand Investment (SGX: 9CI) and City Developments Limited (SGX: C09) that own land banks have a valuable asset on their balance sheets.

And REITs such as Frasers Centrepoint Trust (SGX: J69U) and Mapletree Commercial Trust (SGX: N2IU), which owns a portfolio of heartland retail malls and retail cum commercial properties in Singapore, respectively, are sitting on a veritable gold mine. By buying into such companies and REITs, investors can indirectly own a piece of valuable real estate.

2. Tax exemptions

Companies naturally are obliged to pay corporate taxes to the taxman at the current rate of 17% on their chargeable income. REITs, however, have a distinct advantage in this area. As long as they pay out at least 90% of their earnings as distributions, REITs are exempted from paying income taxes.

In addition, investors also do not need to pay income taxes on dividends received from both REITs and property developers. So, REIT investors win on two fronts as their distributions are completely exempted from income tax. Contrast this with owning an investment property where the property tax rate stands at 10% of the annual value of the property.

3. Easy to transact

Selling physical real estate can be a tedious process. You will need to engage a property agent and lawyer, and get in touch with the banker who offered you the mortgage. Not to mention the property is also an illiquid asset that may take weeks or even months to dispose of.

In contrast, property stocks and REITs offer much less hassle. As they are listed on a stock exchange, you can easily transact through the platform. The market is also fairly liquid and you can obtain your cash much more quickly should you sell. All you need is a stockbroker to facilitate the transaction.

4. Piecemeal holdings

When you’re dealing with physical property, you can’t sell it off piece by piece. It’s impossible to just, for example, sell off the dining room while retaining the rest of the property. For property-related stocks, though, you can choose to sell all or part of your shareholders.

This ability to transact in piecemeal fashion provides you, the investor, with much more flexibility.

5. An external manager

Owning an investment property comes with a set of responsibilities including maintenance and tenant management. You have to periodically check in on the property to ensure it is in good condition and also liaise with your tenant on rent collections. If the unit is vacant, you have to expend the effort to locate a suitable replacement tenant or else your cash flow dries up.

On the other hand, REITs appoint a manager that takes care of all the above, and the portfolio will be professionally managed by a competent team of staff.

The REIT manager’s duty is to ensure the properties are occupied and well-maintained, and that all tenants pay up on time. You can thus outsource the management of the properties to a competent manager who has your best interests at heart. Stay tuned for another five reasons as to why we believe property stocks are a great asset class to own!

First-time investors: We’ve finally released our beginner’s guide to investing. Read it in an afternoon, follow the principles, pick an investing style and buy your first SGX stocks within the next few hours! Click here to download it for free.

By: Royston Yang

Source: https://thesmartinvestor.com.sg/

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E.g. Corporation Tax Act 2010s 519 in the UK. See A. O’Sullivan (2006),

“Residential shut out fears for UK Reits played down after German move”. CityWire.

“What is a REIT?”. reit.com. Retrieved 4 December 2014. Green, Richard K.; Rhea, Parker.

“Listed and Non-Listed Reits: Exploring the Cost Difference” (PDF). USC Lusk Center for Real Estate. University of Southern California. Retrieved 13 December 2018. Moskowitz, Dan.

“REIT Regulation 101”. Investopedia. Retrieved 11 January 2019.

“Guide to Equity REITs”. reit.com. Retrieved 4 December 2014

. “Guide to Mortgage REITs”. reit.com. Retrieved 4 December 2014.

“Real Estate Slated for Eleventh Headline Sector in GICS®”. reit.com. Retrieved 4 December 2014.

“The Most Important Metrics for REIT Investing”. Simply Safe Dividends. Retrieved 16 March 2021.

“REIT 50 Years Timeline”. Reit.com. Archived from the original on 2012-11-13. Retrieved 2012-12-18. Section 10(a) of Public Law no. 86-779, 74 Stat. 998, 1003-1008 (Sept. 14, 1960), enacting Internal Revenue Code sections 856, 857 and 858.

“Realty Trust Wins Fraud Action Brought by SEC”. Washingtonpost.com. 1977-04-22.;

“SEC News Digest” (PDF). “Securities and Exchange Commission. 1977-03-21.

“History of REITs & Real Estate Investing”. Retrieved 24 February 2021.

“Global Real Estate Index Launches”. Retrieved 24 February 2021.

“Investing in Listed Real Estate – IPE Reference Hub”. Retrieved 24 February 2021.

“FTSE Russell Factsheet:FTSE EPRA Nareit Global & Global ex US Indices”. FTSE. Retrieved 25 February 2021.

“What Higher Rates Mean for REITs”. U.S. News & World Report. 8 June 2018.

“Screening For High-Yielding High-Quality REITs”. Forbes. 5 July 2018. “Keeping it Real Estate”. PodBean. 29 June 2018. Pleven, Liam.

“News for SA Reit Association”. Mahipal Singh, Security Analysis with Investment and Portfolio Management, Isha Books 2011, page 145. Baljeez Hbk, July 12, 2007 So, KK.

“Global REIT Survey 2012: Hong Kong”. Global REIT Survey. European Public Real Estate Association (EPRA). Archived from the original on 2013-05-17. Retrieved 2013-02-27.

“Worldwide Wisdom”. reit.com. Retrieved 4 December 2014.

“Arun Jaitley’s Budget 2014-15 promises big push to real estate and the first company to trade is always now existing”. “Better late than never! Investors finally lap up Indian REITs & InvITs”. “History Timeline of J-REIT History”. Retrieved 25 February 2021. Stooker, Richard (2011).

REITs Around the World: Your Guide to Real Estate Investment Trusts in Nearly 40 Countries for Inflation Protection, Currency Hedging, Risk Management and Diversification. “Japan-based REITs have dumped over half their US stocks: report”. The Real Deal. 31 October 2018.

“Siaran Pers: OJK Terbitkan Aturan Inovasi Keuangan Digital”. “Practical Law US Signon”. signon.thomsonreuters.com. Retrieved 2020-12-19.

“Breaking News, World News & Multimedia”. nytimes.com. Retrieved 15 March 2018. Nordberg, Antton.

“The Future of REIT in the Philippines”. KMC MAG Group. Inc. Retrieved 11 May 2015. Endo, Jun (2 March 2021).

“Philippines’ young REIT market snubbed by foreign investors”. Nikkei Asia. Retrieved 17 June 2021. “AREIT, a trailblazer in the country’s REIT path”. Philstar.com. 5 March 2021. Retrieved 17 June 2021.

IRS Announces 2022 Tax Rates, Standard Deduction Amounts And More

The Internal Revenue Service has announced annual inflation adjustments for tax year 2022, meaning new tax rate schedules and tax tables and cost-of-living adjustments for various tax breaks. Most numbers are up more than in recent years because of higher inflation. Note, these numbers, for the tax year beginning January 1, 2022, are what you’ll use to prepare your 2022 tax returns in 2023. (You can find the numbers and tables to prepare your 2021 tax returns here.)

If you don’t expect your income or life to change significantly—by getting married or starting a gig job, for example—you can use the new numbers to estimate your 2022 federal tax liability. If you’re expecting major changes, make sure you check your tax withholding and/or make quarterly estimated tax payments.

All the details on tax rates are in Revenue Procedure 2021-45. We have highlights below. We also cover the new higher retirement accounts limits for 2022.

There’s one big caveat to these 2022 numbers: Democrats are still trying to pass the now $1.85 trillion Build Back Better Act, and the latest (November 3) legislative text includes income tax surcharges on the rich as well as an $80,000 cap—up from $10,000—for state and local tax deductions. Earlier versions included cutting the estate tax exemption in half and increasing capital gains taxes. So stay tuned.

2022 Tax Bracket and Tax Rates

There are seven tax rates in 2022: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Here’s how they apply by filing status:

2022 Standard Deduction Amounts 

The standard deduction amounts will increase to $12,950 for individuals and married couples filing separately, $19,400 for heads of household, and $25,900 for married couples filing jointly and surviving spouses.

The additional standard deduction amount for the aged or the blind is $1,400 for 2022. The additional standard deduction amount for increases to $1,750 for unmarried aged/blind taxpayers.

The standard deduction amount for 2022 for an individual who may be claimed as a dependent (including “kiddies”) by another taxpayer cannot exceed the greater of $1,150 or the sum of $400 and the individual’s earned income (not to exceed the regular standard deduction amount).

Personal Exemption Amount

The personal exemption amount remains zero in 2022. The Tax Cuts and Jobs Act suspended the personal exemption through tax tax year 2025, balancing the suspension with an enhanced Child Tax Credit for most taxpayers and a near doubling of the standard deduction amount.

Alternative Minimum Tax Exemption Amounts

Here’s what the alternative minimum tax (AMT) exemption amounts look like for 2022, adjusted for inflation:

Kiddie Tax 

A child’s unearned income is taxed at the parent’s marginal tax rate; that tax rule has been dubbed the “kiddie tax.” The kiddie tax applies to unearned income for children under the age of 19 and college students under the age of 24. Unearned income is income from sources other than wages and salary. For example, unearned income includes dividends and interest, inherited Individual Retirement Account distributions and taxable scholarships.

For 2022, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (1) $1,150 or (2) the sum of $400 and the individual’s earned income (not to exceed the regular standard deduction amount).

If your child’s only income is unearned income, you may be able to elect to include that income on your tax return rather than file a separate return for your child. This is allowed for 2022 if the child’s gross income is more than $1,150 but less than $11,500. But the tax bite may be less if your child files a separate return.

Capital Gains Tax

Capital gains tax rates remain the same for 2022, but the brackets for the rates will change. Here’s a breakdown of long-term capital gains and qualified dividends rates for taxpayers based on their taxable income:

Section 199A deduction (also called the pass-through deduction)

As part of the Tax Cuts & Jobs Act, sole proprietors and owners of pass-through businesses are eligible for a deduction of up to 20% to lower their tax rate for qualified business income. Here are the threshold and phase-in amounts for the deduction for 2022:

Federal Estate Tax Exemption

The federal estate tax exemption for decedents dying in 2022 will increase to $12.06 million per person or $24.12 for a married couple.

Gift Tax Exclusion

The annual exclusion for federal gift tax purposes jumps to $16,000 for 2022, up from $15,000 in 2021.

Further Reading:

IRS Announces Higher 2022 Retirement Account Contribution Limits For 401(k)s, Not IRAs

Follow me on Twitter or LinkedIn.

I cover personal finance, with a focus on retirement planning, trusts and estates strategies, and taxwise charitable giving. I’ve written for Forbes since 1997. Follow me on Twitter: @ashleaebeling and contact me by email: ashleaebeling — at — gmail — dot — com

Source: IRS Announces 2022 Tax Rates, Standard Deduction Amounts And More

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“Notice 2011-43: Transitional Relief Under Internal Revenue Code § 6033(j) for Small Organizations

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China Leaps Ahead in Effort to Rein In Algorithms

Beijing is building a system to ensure that the automated processes of Internet platforms are fair, transparent and in line with the ideology of the Communist Party

Regulators called for the algorithms to be fair and transparent, following the ideology of the Communist Party of China.

The campaign puts China one step ahead in policing tech forums, as governments around the world grapple with how to respond to automated technologies that reshape business, social interactions and politics.

Earlier this year, the European Union proposed restricting certain uses of artificial intelligence to reduce potential harm. In the US, lawmakers are investigating Facebook’s influence Inc. NS

Algorithm-driven content on users, after Businesshala reported that the company’s Instagram app has a negative impact on children’s mental health.

China has targeted algorithms more aggressively under the close watch of its domestic tech sector. Draft guidelines released this summer would require algorithms to protect the rights of workers and consumers, and restrict the use of algorithms to manipulate user accounts, online traffic or search results.

“We don’t necessarily see China as a regulatory innovator, but in this case they are,” said Rogier Creamers, an assistant professor at Leiden University in the Netherlands, which focuses on Chinese technical policy.

Under a three-year plan released last week, Chinese regulators outlined steps to monitor algorithms, including a registration process and the establishment of a technical team to evaluate the mechanisms and risks of an algorithm.

The latest campaign builds on a broad regulatory push in China’s tech sector that has prompted investigations into some of the country’s biggest companies, including e-commerce giant Alibaba Group Holding. Ltd.

The push is partly directed at business practices that regulators deem harmful so workers or consumers.

Companies such as Meituan and Didi have faced heat over the working conditions of drivers, as well as calls for creating algorithms that schedule workers’ tasks and pay more transparently. Officials have also warned tech companies this year against exploiting personal data and using algorithms to charge discriminatory prices from customers.

China’s Cyberspace Administration, Alibaba and Didi did not respond to requests for comment. China is currently celebrating its National Day holiday.

Meituan declined to comment. The company previously published an explanation of its delivery algorithm and said it is making changes to give delivery drivers more flexibility.

Experts said it would be a challenge for regulators to tighten controls on algorithms without hindering development or innovation in one of China’s most successful sectors. Internet companies rely on complex mathematical instructions for tasks ranging from analysis of social-media behavior to mapping optimal distribution routes.

While algorithms have contributed to technological advancement and societal development, the CAC said in last week’s announcement, they have also brought “challenges to ideological security, a fair and equal society, and the protection of the legal rights of Internet users.”

Beijing-based partner at law firm Bird & Bird, James Gong, said tighter regulatory oversight of algorithms is likely to impact China’s internet industry.

Mr. Gong said of the country’s Internet companies, “Almost all of them use algorithms and automated decision-making and profiling to ensure that their marketing is more accurate and to improve business efficiency and increase profits.” Is.”

A senior manager at ByteDance Ltd said the requirement to register the algorithm would only add a step, restricting the learning of user behavior and recommendation services, as well as requiring disclosure of proprietary technology that could hurt the company’s business. .

ByteDance, which owns social-media sensation TikTok and its Chinese sister app Douyin, is known for its powerful algorithms that drive user recommendations and content.

“The regulatory environment is clear, and we need to start thinking about how to adjust accordingly,” the ByteDance manager said. He said that since most of the new regulation is still under debate, it is difficult to say what the immediate commercial impact will be.

ByteDance did not respond to a request for comment.

Sam Sachs, senior fellow at Yale Law School’s Paul Tsai China Center, said China’s approach could appeal to other countries that want a thriving digital economy while maintaining a firm grip on political and social discourse. However, she said there is still a lot of uncertainty over the details and enforcement of these new rules.

“I think they understand that this is an impossible task that they have set for themselves,” Ms Sachs said. “I would also say that three years can be ambitious.”

The CAC guidelines also state that algorithms used by Chinese companies must uphold core socialist values ​​and promote “positive energy” in content provided to users.

China is taking more control of online content and communities. In recent months, it has severely restricted online-videogame time for players under the age of 18, banned pop-idol rankings and criticized online male personalities for being too sacrilegious. are visible.

“It’s almost taking online censorship up a notch,” Ms Sachs said. “It is saying that you have an obligation to ensure that any content that is algorithmically driven that you feed into the online space is to shape socialist values.”

By: Stephanie Yang, Reporter, The Wall Street Journal

Source: China Leaps Ahead in Effort to Rein In Algorithms

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Did Inequality Increase During Pandemic?

It is widely believed that the Covid-19 pandemic and the reactions to it by governments and businesses accelerated an already-strong trend toward increasing economic inequality in the U.S. People on the political left think this and people on the political right do too, a heartwarming exception to the political polarization of our age.

This belief is also based on some actual evidence. Thanks to big increases in the prices of stocks and other assets after the initial shock of the pandemic, the nation’s billionaires have in fact added many billions to their net worths, while lots of affluent homeowners and 401(k)-holders have added hundreds of thousands.

The risks of both Covid-19 infection and job loss have been higher for those who can’t work from home, and those who can work from home tend to have more degrees and earn more money than those who can’t. Poorer children have struggled much more with remote schooling than richer ones. And so on.

So yes it’s possible, maybe even likely, that when the dust settles and all the relevant data are available, we will conclude that economic worsened over the course of the pandemic. But I wouldn’t be sure of it. Pandemics are one of the “Four Horsemen” of economic equalization described by historian Walter Scheidel in his acclaimed 2017 book, “The Great Leveler: Violence and the History of from the Stone Age to the Twenty-First Century” (the other three being war, revolution and state collapse).

Scheidel did have more devastating diseases in mind than what Covid-19 has proved to be so far, but as of January, Nobel-prize-winning economist Angus Deaton found that economic inequality among countries had decreased during the pandemic, although this didn’t hold on a population-weighted basis because the of India, the largest country in the bottom half of the world’s income distribution (it’s “lower middle-income,” according to the World Bank), had suffered greatly even before this year’s rise of the Delta variant.

Within the US, the very real forces pushing toward more inequality have been counteracted by an unprecedented outpouring of government aid, while trends boosting wages in the lower part of the distribution that were apparent before the pandemic seem to be accelerating now. The numbers available so far, while preliminary and in some cases a bit contradictory, aren’t really telling a story of exploding inequality.

Perhaps the simplest of these numbers, from the distributional financial accounts that the Federal Reserve began releasing quarterly in 2019, is the wealth share of the bottom 50 per cent of the wealth distribution. It bottomed out in the second quarter of 2011 at a barely-there 0.4 per cent of household wealth and has been rising most quarters since, reaching 2 per cent in the first quarter of this year for the first time since just before the Great Recession started in December 2007.

This measure, which I’ve written about before, has its limitations. The Fed estimates wealth by combining household-level data on assets and liabilities from its triennial Survey of Consumer Finances, most recently conducted in 2019, with aggregate numbers from its quarterly Financial Accounts of the United States, and lumps the entire bottom half of the wealth distribution together because it doesn’t have enough information to do otherwise. It is able to slice things more finely within the top half, where the top 1 per cent gained wealth share since the end of 2019 while those between them and the 50th percentile lost ground.

So yes it looks like wealth inequality increased during the pandemic within the top half, and most of the bottom half’s gains came from those just above it in the wealth distribution rather than the very richest. The bottom half did enjoy a bigger percentage wealth gain than the top 1 per cent —30.3 per cent versus 20.7 per cent since the end of 2019 — although because it had so little wealth to start with, that amounted to just $609 billion in new wealth versus $7.1 trillion for the 1 per cent. Still, the total wealth of the bottom 50 per cent in the first quarter of this year amounted to 6.3 per cent of that of the top 1 per cent, up from 5.8 per cent at the end of 2019 and the highest such percentage since 2007. In that sense, at least, inequality between the top and bottom decreased.

That sense may not be enough for most people who are concerned about inequality, but improved conditions for the less-well-off are worth celebrating in any case, and it’s not just the Federal Reserve that’s detecting signs of them. Researchers at the Urban Institute estimated last month that, thanks to big job gains and the benefits included in the American Rescue Plan approved in March and earlier pandemic-aid legislation, the share of Americans below the poverty line would fall to 7.7 per cent this year from what they estimated using the same methodology to have been 13.9 per cent in 2018.

These estimates use what’s called the Supplemental Poverty Measure, a decade-old metric that attempts to better incorporate all the resources available to poor families, and the Urban Institute’s number for 2018 is a bit higher than the 12.8 per cent SPM rate estimated by the Census Bureau and the 12.7 per cent estimated by Columbia University’s Center on Poverty and Social Policy based on Census data. Measuring poverty is complicated, especially over time. But the trend does seem to be headed in the right direction.Because the expected drop in poverty in 2021 owes so much to federal aid, some of it could prove temporary. But gains for the lower part of the income distribution are also coming from the private sector in the form of higher wages.

It’s hard to know what to make of the 2020 data, which may be skewed by low response rates to government surveys and big job losses among low-wage workers. But the high wage growth before the pandemic and so far this year seems to be for real, and all the anecdotal evidence from the job market points to it continuing. In previous economic expansions the wage gains at the bottom of the scale came only after years of job growth; this time it seems to be the norm from the get-go.

A full picture of the pandemic’s impact on income and wealth inequality will have to wait on more data. The most recent income-distribution numbers available are from 2019 in the case of Census Bureau survey data and 2018 for tax statistics from the Internal Revenue Service. The Census Bureau’s estimate of the Gini coefficient, a measure of how equally incomes are distributed that comes out to one if one person gets all the money and zero if everyone earns the same amount, has been rising at a somewhat slower pace in the 2000s than in the 1980s and 1990s. It even fell slightly in 2018 and 2019, although it seems too early to make much of that.Such broad measures of inequality have taken something of a backseat in recent years to the statistics on income and wealth at the very top compiled from tax data by economists Thomas Piketty, Emmanuel Saez, Gabriel Zucman and others. Saez and Zucman’s most recent updates of the data (and revisions in response to critiques from other economists), show a decade-long plateau in the share of income going to the top 0.1 per cent and a more recent halt in wealth-share gains.

Given what we know from other sources it seems pretty likely that the income and wealth shares of the top 0.1 per cent rose in 2020, and given that I don’t have a great explanation for why inequality was declining — or at least somewhat on hold — before the pandemic, I’m not going to make any confident predictions here about what it will do after.

One thing that is clear from the above chart is that inequality can decline, and decline by a lot. Amid the great equalization of the mid-20th century, economist Simon Kuznets (another Nobel winner) wrote an influential paper in 1955 speculating that it might be in the nature of economic modernization and industrialization for inequality to at first increase and then decline. After decades of rising inequality in the US and other rich countries, such examinations are now more likely to conclude that a growing gap between rich and poor is an inevitable trait of capitalist economies (Piketty’s “Capital in the Twenty-First Century”) or human society in general in the absence of calamity (Scheidel’s book). They may be right! But again, I wouldn’t be sure of it.

By: Justin Fox | Bloomberg Opinion

Source: Did inequality increase during pandemic? Wait for more data to get answers | Business Standard News

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