Saturday, January 06, 2018

US Inequality Again

New York University’s Edward N. Wolff, tracking the distribution of household wealth over a half century.

From 2007 to 2010, median household wealth fell a steep 44 percent, leaving it below its 1969 level. (Wolff equates wealth with household net worth, or marketable assets minus debts.)

From the early 1980s through 2016, more than 97 percent of the gains in total household wealth went to the top 20 percent. 

The bottom 60 percent of households did not pocket any wealth gains between 1983 and 2016.

The wealth gap accelerated after the most recent recession, when the top 20 percent of households saw their share rise from 85 to 90 percent. 
The top 1 percent of households with the highest net worth saw their share of the wealth pie increase from 35 percent in 2010 to 39 percent in 2016.
 More wealth concentrated in fewer households left median household net worth 34 percent below its 2007 peak, despite both housing and stock prices surpassing their pre–2007–10 financial crisis highs.


Wages in the U.S. still aren’t rising like they used to, but wage inequality is. In recent years, with the economy ever closer to full employment, wages have remained weak.
 In the latest jobs report, the Labor Department estimated that U.S. employers added an ample 148,000 jobs, and the unemployment rate stayed at a very low 4.1 percent. But average hourly earnings in the private sector were up just 2.5 percent from a year earlier -- almost a full percentage point short of the pace that prevailed before the last recession.
 Consider the difference between the top 10 percent, a group that includes such sectors as computer programming and asset management, and the bottom 10 percent, which includes gas stations, bowling centers and limited-service restaurants. As of November, the cutoff to be in the top group was an hourly wage of $39.15, up 2.8 percent from a year earlier. The threshold for the bottom group was $16.85, an increase of just 1.6 percent from a year earlier.

The old saying the rich really get richer while the poor get poorer is true for U.S. households. 

According to Federal Reserve Governor Lael Brainard, the recently released  Survey of Consumer Finances (SCF) showed that the top 1 percent of households held a 24 percent share of all U.S. household income as of 2015 and a 39 percent share of all U.S. household wealth. That's a seven- and nine-percentage-point increase respectively from the values 27 years prior.

The SCF also noted racial and ethnic disparities with respect to income and wealth. The average income for white households in 2015 was approximately $123,000 annually, while Hispanic and African-American families came in below half of that mark at $57,000 and $54,000, respectively.

With respect to wealth, white families hold a more than fivefold advantage. The average wealth for a white household in 2016 was nearly $933,000, while Hispanic households averaged $191,000 and African-American families averaged $138,000 in average wealth holdings.
http://review.chicagobooth.edu/economics/2018/article/homing-wealth-inequality-america
https://www.bloomberg.com/view/articles/2018-01-05/the-biggest-raises-are-going-to-the-well-off
http://theweek.com/articles/737647/rich-may-richer-but-are-poor-getting-poorer

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