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There's a lot of money in Boston

Posted by Kevin Hartnett  May 16, 2013 01:21 PM

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The Great Recession of 2007 hit all American households hard, but a March report from the Center on Wealth and Philanthropy at Boston College shows that the economic downturn was relatively less hard in Boston.

The report was written for The Boston Foundation in order to assess the future of charitable giving, but its most interesting results describe the overall state of wealth in the region.

By now it’s well understood that the recession was gentler on wealthier Americans, and that begins to explain why the Boston area—which is richer, on average, than the nation as a whole—bounced back so quickly. The Boston College report cites three specific reasons why the Boston metropolitan area (defined as Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk, and Worcester counties) fared so well: The resilience of the real estate market in the northeast; high rates of investment in the stock market, which has recovered faster than other parts of the economy; and the relatively low debt levels of Boston households.

Boston as a whole weathered the recession well, but the region’s wealthiest residents came out of it the best. According to the report, the 14 percent of Boston area households with a net worth north of $1 million lost 15.9 percent of their wealth. At the same time, the 41 percent of households with a net worth of less than $100,000 lost 77 percent of their wealth. It’s such a staggering difference that the authors of the report decided to state it twice, writing, “It’s worth repeating this important finding: 41 percent of Boston area households lost more than three-quarters of their wealth during the recession.”

The recessionary shocks took a toll on charitable giving, knocking it down 23 percent, from $2,420 per household in 2007 to $1,861 per household in 2009. But even with this dip, the overall outlook of the report is quite sunny for Boston where, from 1997-2011, the economy grew faster and the unemployment rate remained lower than national rates, and, today, the broad top-tier of society is awash in money.

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About brainiac Brainiac is the daily blog of the Globe's Sunday Ideas section, covering news and delights from the worlds of art, science, literature, history, design, and more. You can follow us on Twitter @GlobeIdeas.
Brainiac blogger Kevin Hartnett is a writer in Columbia, South Carolina. He can be reached here.

Leon Neyfakh is the staff writer for Ideas. Amanda Katz is the deputy Ideas editor. Stephen Heuser is the Ideas editor.

Guest blogger Simon Waxman is Managing Editor of Boston Review and has written for WBUR, Alternet, McSweeney's, Jacobin, and others.

Guest blogger Elizabeth Manus is a writer living in New York City. She has been a book review editor at the Boston Phoenix, and a columnist for The New York Observer and Metro.

Guest blogger Sarah Laskow is a freelance writer and editor in New York City. She edits Smithsonian's SmartNews blog and has contributed to Salon, Good, The American Prospect, Bloomberg News, and other publications.

Guest blogger Joshua Glenn is a Boston-based writer, publisher, and freelance semiotician. He was the original Brainiac blogger, and is currently editor of the blog HiLobrow, publisher of a series of Radium Age science fiction novels, and co-author/co-editor of several books, including the story collection "Significant Objects" and the kids' field guide to life "Unbored."

Guest blogger Ruth Graham is a freelance journalist in New Hampshire, and a frequent Ideas contributor. She is a former features editor for the New York Sun, and has written for publications including Slate and the Wall Street Journal.

Joshua Rothman is a graduate student and Teaching Fellow in the Harvard English department, and an Instructor in Public Policy at the Harvard Kennedy School of Government. He teaches novels and political writing.


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