Wealth gap sets record high
Wealth inequality in the United States is at its highest on record, according to a new report from the Pew Research Center. The analysis confirms previous reports documenting the immense transfer of wealth to the top during Obama administration’s “economic recovery.”
As a measure of wealth inequality, Pew makes a comparison between the median net worth of upper-income families with the median net worth of middle-income and lower-income families. Upper-income families are defined as those with more than twice the overall median income, adjusted for family size.
In 2013, upper-income median net worth was 6.6 times more than median net worth for middle-income families, up from 6.2 times in 2010 and 3.4 times in 1983, when the Federal Reserve began keeping such records. It is nearly 70 times more than the median net worth for low-income families, also the highest on records going back to 1983.
The data on median household net worth documents a sharp diversion of fortunes over the past 30 years.
By the definition used by the Pew report, 21 percent of families are categorized as upper-income. One third of families are categorized as low-income, and about half of families are middle-income.
The Pew report actually underestimates the growth of wealth inequality, since the greatest concentration of wealth is actually accrued to the top one and even the top 0.1 percent of the population.
A separate report from researchers at the University of Michigan found that wealth inequality had doubled since 2003, with households in the top 5 percent now having a wealth that is 426.5 times the average wealth of households in the bottom 25 percent.
The stock market has been a principal mechanism for the transfer of wealth from the working class to the corporate and financial aristocracy.