The Political Consequences Of Stock Ownership
November 8, 1999
In 1980, about one-third of all housing in Britain was owned by the state. Conservative British Prime Minister Margaret Thatcher's sale of government-owned housing directly to the tenants was wildly popular, and created a profound change in political attitudes.
Once workers became homeowners, they ceased being wards of the state. Suddenly, they became very concerned about property taxes and government policies that affected property values. Thus, millions of Labor Party voters found themselves sympathetic to the Conservative Party's message. In time, even the Labor Party was forced to move well to the right of its previous hard-core socialism.
Now, something similar is happening in America due to growing stock ownership.
- According to a new study by the Securities Industry Association and the Investment Company Institute, 49.2 percent of U.S. households now own stock, up from only 19 percent in 1983.
- A just-released Gallup Poll puts the number even higher at 60 percent -- 65 percent among those with middle incomes.
A key reason for growth in equity ownership has been the widespread growth of defined-contribution pension plans, such as 401(k)s, in which workers invest for their own retirement, rather than receiving a fixed monthly pension from their employer.
This growth in stock ownership may already be affecting political attitudes. According to Rasmussen Research, those who own at least $5,000 of stock are more likely to vote Republican than Democrat.
- Even among core Democratic constituencies, the percentage of those voting Republican jumps once they gain a modest amount of stock ownership.
- For example, the percentage of blacks identifying themselves as Republican rises from 6 percent among those with no stock to 21 percent among stock owners (see figure http://www.ncpa.org/pd/gif/pd110899.gif).
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, November 8, 1999.
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