Skip to comments.US middle class' net worth lowest in decades
Posted on 11/29/2012 1:41:37 PM PST by Red Steel
A new report shows that the gap between the rich and the poor in the US is significantly wider than it used to be, with the annual median wage falling to $26,364 in 2010 while the high-earners increased their wealth by 71 percent.
The New York University report found that in 2010, the median net worth in the US reached its lowest point since 1969 at $57,000. Conducted by Professor Edward Wolff, who has studied Americans net worth since 1983, the report provided some surprising revelations about the extent of the income inequality.
While the middle class lost 18 percent of their net worth as a result of the the housing crisis, the top one percent of the richest Americans increased their earnings by 71 percent, thereby widening the gap between the rich and the poor. Each of the one percent is on average worth 288 times the value of a middle class American, the Economic Policy Institute recently reported.
The annual median wage decreased in 2010 to $26,364, hitting the lowest level since 1999. A 2011 Gallup poll also found that 20 percent of Americans rated their financial situation as poor, which is more than the 16 percent of Americans who viewed their finances this way during the housing crisis.
While incomes declined, the middle class simultaneously increased their debt significantly, especially after the most recent recession.
The evidence suggests that middle class households, experiencing stagnating incomes, expanded their debt mainly in order to finance normal consumption expenditures rather than to increase their investment portfolio, Wolff writes. However, a second reason now appears to be that the middle class also went into debt to increase their leverage and to raise their rate of return, at least when asset prices were rising. Of course, the increased leverage also made them very vulnerable when asset prices collapsed.
With a middle class earning less and owing more, together with the one percents financial success in a struggling economy, the gap between the rich and the poor is growing at an alarming rate.
What is so alarming about a “gap between the rich and poor”?
Last year I made 46,000. After being out of work for 6 months I took a job making 38,000. When a nation is full of people who love sin, there are consequences. The LORD will provide.
And most Americans will believe it.
I stopped reading right there (insert sound of paper being balled up and thrown into the wastebasket).
The author confuses income with wealth, and vice versa...which makes the rest of the article suspect.
Some of the wealthiest people in the World make very little income as a percentage of their wealth. Most poor and middle class people make substantially more income every year than they have in wealth.
The wealthy simply have accumulated vast amounts of money.
To the Marxist, class-warfare mentality, it's not FAAAAAAAIIIIRRR!
The typical leftist definition of "fair" demands equality of outcome, regardless of any other factor(s). It's ironic to me that folks who believe this way are effectively begging to be rendered powerless. After all, if your personal risk, efforts and decisions have no effect on the outcome, then you have no power. And that's what these people apparently long for.
“Last year I made 46,000. After being out of work for 6 months I took a job making 38,000.”
As I’ve posted on other threads for a year now, anyone I know who lost a job and was fortunate enough to find another makes much less than before (even if it is doing the same work). I guess it just didn’t happen to enough people in time for the election (or maybe it did and it drove them to vote for Nanny State).
Frightening; glad you found something. The Lord will provide.
This is the sort of “study” that Thomas Sowell is forced to disembowel on an annual basis.
What is alarming is the fall in middle class net worth. Attempting to generate hate and envy of between fellow Americans is nothing but pure domestic warmongering. This writer deserves a slip knot around his neck.
There fixed it...
By using this terminology they want to leave the subliminal impression that everyone's income should be equal, and that if incomes aren't equal then this is a problem that needs to be fixed by government liberals.
It’s called “socialism”.
It’s a transition between a free system and a communist one.
Marx wanted to get rid of the middle class.
We’ve been implementing Marx’s ideas - now we’re surprised at the results?
If I remember correctly, after the USSR was split up and the nationalized wealth was redistributed, about 8 people got everything worth anything.
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The more important figure is income and wealth mobility. That's a proportional function of taxation, regulation and crony capitalism. All the Left’s “hate-the-rich” ire needs to be directed toward a mirror - they're creating a permanent underclass with their polices and giving cover to crony capitalists aka limousine liberals.
The fall in middle-class net worth is a function of RE “wealth” tied up in newly discounted homes and job security. People are digging into their nest eggs to make ends meet.
The macroeconomy is beyond the control of the average American. In this case those making bad decisions are rewarded while those making good decisions bear the full brunt of taking responsibility for their lives.
It’s bizarro world.
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