Forget the 1%

AMONG the most controversial of Thomas Piketty’s arguments in his bestselling analysis of inequality, “Capital in the Twenty-First Century”, is that wealth is…

Source: www.economist.com

From the early 1980s, however, these trends have reversed. The ratio of household wealth to national income has risen back toward the level of the 1920s, but the share in the hands of middle-class families has tumbled. Tepid growth in middle-class incomes is partly to blame; real incomes for the top 1% of families grow 3.4% a year from 1986-2012 while those for the bottom 90% grow 0.7%.  The main cause of falling middle-class net worth is soaring debt. Rising home values do little to raise middle-class wealth since mortgage debt also soar. The recession batters home prices but leaves the debt untouched, further squeezing middle-class wealth.

= The really, really rich get much, much richer…

On the other side of the spectrum, the fortunes of the wealthy have grown, especially at the very top. The 16,000 families making up the richest 0.01%, with an average net worth of $371,000,000 ($371 mil), now control 11.2% of total wealth—back to the 1916 share, which is the highest on record. Those down the distribution have not done quite so well: the top 0.1% (consisting of 160,000 families worth $73,000,000 ($73 mil), on average) hold 22% of America’s wealth, just shy of the 1929 peak—and exactly the same share as the bottom 90% of the population. Meanwhile the share of wealth held by families from the 90th to the 99th percentile has actually fallen over the last decade, though not by as much as the net worth of the bottom 90%.

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About akiramorikawa

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