In case you were hoping that America’s three-decade-long trend toward extreme wealth inequality was starting to reverse itself, Pew has some bad news for you.
Nothing has changed.
The rich are still getting richer… and everyone else is still getting hosed.
Pew’s latest data looked at how American households have fared since the depths of the recession.
The richest 7% of American households–8 million with more than $836,000 in net worth–did quite well from 2009 to 2011.
Their average net worth rose from $2.5 million to $3.2 million, a 28% jump.
The other 93% of American households, meanwhile, lost out.
Their average net worth dropped from a measly $140,000 to $134,000.
In case that’s not depressing enough for you, take a look at what happened to the relative wealth shares of these two groups of households over the 2009-2011 period.
The richest 7% of American households went from owning 56% of the country’s net worth to owning 63% of it. That left only 37% of the country’s net worth to everyone else.
The source of this relative wealth bonanza for the richest households, not surprisingly, is the stock market.
America’s richest households own most of the stocks in this country.
The stock market has more than doubled since the 2009 lows and is hitting new highs.
The value of houses, meanwhile–the most valuable asset for almost “everyone else”–has risen only slightly. And house prices are still well below their pre-recession bubble peaks.
Pew ResearchNow, if you’re in the 7% of households that are getting richer, you might think this trend is perfectly fine. After all, who minds getting rich?
The problem, unfortunately, is that America’s growing wealth inequality is hurting the purchasing power of mainstream American consumers. And these consumers provide the spending that drives most of the economy. (Rich folks actually don’t spend that much as a percentage of the economy).
So with “everyone else” getting hosed, the health of the overall economy is deteriorating. That’s hurting the ability of companies owned by the richest households to grow. And their lack of growth will eventually be reflected in the value of the stocks owned by the richest households. (Eek!)
More on America’s shocking inequality below…
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