Forget Billionaires - America Runs on Millionaires

Tim Stenovec (0:02)

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Bloomberg (0:08)

You're listening to Bloomberg Businessweek with Carol Massar and Tim Stenovec on Bloomberg Radio.

Carol Massar (0:15)

We've got with us Eric Zwick, Associate Professor of Finance at the University of Chicago School of Business, and Owen Zidar, Professor of Economics and Public Affairs at Princeton University. They're the authors of the brand new book, The Everywhere Millionaire, Who is Really Rich in America, and How They Got There. Welcome guys, welcome. Congratulations on the new book.

Owen Zidar (0:35)

Thanks for having us.

Tim Stenovec (0:36)

This is really interesting because we do talk about the rich all the time, as you know, and we track them pretty closely. Do we have it wrong in terms of who is rich in America?

Owen Zidar (0:45)

If you look at the data, it's really amazing. There's this legion of millionaires who are ordinary Americans running pretty mundane businesses who are extraordinarily wealthy. Collectively, if you add up all of their wealth, it's 10 times that of the people you just named, the richest 400 people.

Carol Massar (1:01)

You guys have a chart at the beginning of the book that shows, here's the Forbes 400 and here the other people were focused on, and it's a remarkable delta.

Eric Zwick (1:10)

That's right. You went down that list and it was tech, tech, tech, a little bit of finance, tech. So we're told the path to prosperity, path to the top is Silicon Valley, Sand Hill Road, Wall Street, and we're interested in Main Street and Metro Parkway.

Tim Stenovec (1:24)

Car dealerships.

Eric Zwick (1:25)

Exactly. Hold on, hold on.

Carol Massar (1:27)

Before we get to the car dealerships, beer distributors, and the farmers and the HVAC folks which you guys read about.

Tim Stenovec (1:31)

Or doctors.

Carol Massar (1:32)

There is something to be said about what is happening and what has happened in technology. You go out to Silicon Valley right now, you can't find an entry, a starter home in San Francisco because everybody who's worked at Anthropic, OpenAI or SpaceX are gobbling those things up. We're going to have, I don't have that data in front of me, you're going to have some, just from Anthropic loan, seven billionaires and then many hundreds of millionaires as a result of that.

Eric Zwick (1:58)

That is a totally- Does that change the game? Happening. Does that change the data? That is totally a story that's true and it remains the case, the American economy is far broader and far more diverse. There are eight million homes worth more than a million dollars before this demand surge in San Francisco.

It's true that if you look at the coast, maybe they have 10 percent of the population, 25 percent of the income. It's also true that 75 percent of it is away from the coast. We're sort of saying, look, it's the duck rabbit story, kind of like, yeah, it's a duck. We're not saying it's not a duck, but if you look at it in a slightly different way, it's also a rabbit. We're saying there's this massive amount of wealth that's abundant, also closer to home for so many Americans that aren't used to thinking about that way, and think the tech is just gobbling everything up and we just aren't seeing that.

Tim Stenovec (2:42)

Let's get to the process because you guys basically make this point that we are in the first age of millionaires. How did you guys go about collecting this data? I think that in itself was fascinating.

Owen, come on in.

Owen Zidar (2:57)

There are two steps. The first is a decade of research where it started with an investigation at the Treasury Department, where they brought us in to try to figure out how much private business owners are paying in taxes. We had to link private businesses to their owners to figure out the answer to that, which is a pretty nerdy small thing. Then what emerged was this amazing picture of extraordinary wealth that no one talks about. It's just really hard to capture who's rich because if they're not public company CEOs, they don't report to investors, and wealthy people don't answer surveys often. This was a new view on wealth in America.

Tim Stenovec (3:35)

But they filed tax forms.

Owen Zidar (3:37)

Exactly, everyone.

We had that as a toehold and then we did a series of research projects, and that was the first step. Then the second step was to go out and move beyond that private and protected data, which is de-identified, to try to tell some stories and bring it to life. So we went and collected private jet data, super yacht data, property registries, industry information of things like car dealers that showed up on the list. And then we started to get these stories and asking people, who's the wealthiest person you know? And you get amazing stories. We have so many millionaire stories now of just people doing pretty mundane things, like storing paper, or fixing garage doors, or distributing toilet paper.