Source: WSJ
By Robert Frank
After my last post on the national income pie, many readers asked about wealth, i.e. accumulated assets.
A new chart from the Economic Policy Institute, using data from NYU Economist Ed Wolff, shows that more than 80% of the nation’s wealth gains between 1983 and 2009 went to the wealthiest top 5%. The top 1% gained 40% of the nation’s total wealth gain, while the next 4% gained 41.5%.
The share of wealth held by the bottom 60% dropped 7.5%.
Put another way, the top 1% gained an average of $4.5 million per household, while the next richest 4% gained $1.2 million.
The chart appears below.
This is dismal news, of course, and highlights once again the rise in inequality and the increasingly top-heavy nature of the global economy. It’s also hard to label it as a “Republican” phenomena, since the time frame includes Clinton administrations.
Yet the numbers also beg some perspective.
First, while the gains going to the top rose dramatically, this gain isn’t quite as dramatic when you look at total share of wealth held by each group. According to the Federal Reserve’s Surveys of Consumer Finance, the top 5% controlled 60% of the nation’s wealth as of 2007 (the latest period available), up from 54.2% in 1987. So their total share of wealth only went up by 6 percentage points , or a little over 10% in relative terms.
The share of the bottom 50% declined from 3% to 2.5%.
It also depends on what time frame is used. Many would be surprised to learn that the share of wealth held by the top 1% has actually declined over the past 10 years, dripping from 34.6% to 33.8%.
Using the time frame of 1983 to 2009 also smooths over a lot of the wealth volatility and change at the top. An analysis of the 2007 to 2009 financial crisis and recession shows that the wealth of the top 20% declined more than any other group: 29% compared to 27% and 23% for the middle and bottom.
They may have well rebounded since then. But the people in the top 1% today may not be the same people who were there in 1983, or even 1995.
By Robert Frank
After my last post on the national income pie, many readers asked about wealth, i.e. accumulated assets.
A new chart from the Economic Policy Institute, using data from NYU Economist Ed Wolff, shows that more than 80% of the nation’s wealth gains between 1983 and 2009 went to the wealthiest top 5%. The top 1% gained 40% of the nation’s total wealth gain, while the next 4% gained 41.5%.
The share of wealth held by the bottom 60% dropped 7.5%.
Put another way, the top 1% gained an average of $4.5 million per household, while the next richest 4% gained $1.2 million.
The chart appears below.
This is dismal news, of course, and highlights once again the rise in inequality and the increasingly top-heavy nature of the global economy. It’s also hard to label it as a “Republican” phenomena, since the time frame includes Clinton administrations.
Yet the numbers also beg some perspective.
First, while the gains going to the top rose dramatically, this gain isn’t quite as dramatic when you look at total share of wealth held by each group. According to the Federal Reserve’s Surveys of Consumer Finance, the top 5% controlled 60% of the nation’s wealth as of 2007 (the latest period available), up from 54.2% in 1987. So their total share of wealth only went up by 6 percentage points , or a little over 10% in relative terms.
The share of the bottom 50% declined from 3% to 2.5%.
It also depends on what time frame is used. Many would be surprised to learn that the share of wealth held by the top 1% has actually declined over the past 10 years, dripping from 34.6% to 33.8%.
Using the time frame of 1983 to 2009 also smooths over a lot of the wealth volatility and change at the top. An analysis of the 2007 to 2009 financial crisis and recession shows that the wealth of the top 20% declined more than any other group: 29% compared to 27% and 23% for the middle and bottom.
They may have well rebounded since then. But the people in the top 1% today may not be the same people who were there in 1983, or even 1995.