- Income inequality has reached a record high since the US Census began tracking it 50 years ago, reported Taylor Telford for The Washington Post, citing new US Census data.
- The median household income has barely grown in 20 years when adjusted for inflation – and it signals a shrinking middle class.
- Many believe generational wealth to be a key cause behind America’s income inequality.
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The gap between the rich and the poor continues to widen.
Income inequality reached a record high in 2018 since the US Census began tracking it 50 years ago, reported Taylor Telford for The Washington Post, citing the US Census 2018 American Community Survey released this week. The chasm is most prevalent in wealthy coastal states and areas with “widespread poverty,” she wrote.
While the median household income in the US also reached an all-time high – just over $US63,000 – it’s about the same as it was two decades ago when adjusted for inflation, according to Telford.
This stagnant growth underscores a 2018 report by the Pew Research Centre, which found that America’s middle class is shrinking – while it’s stable in size, it’s financial gains were “modest” compared to higher income households.
An Insider and Morning Consult survey from earlier this year also found that middle-class America isn’t faring that well. Middle-class Americans are behind on homeownership and retirement savings, partly because they have debt to pay off, the survey found. Even some respondents making six figures identified as middle-class rather than affluent.
Generational wealth also continues to grow
As income inequality has continued to increase in the US over the years, many consider generational wealth to be one of its key causes.
The 15 family dynasties in the US own a combined $US618 billion, according to the left-leaning Institute for Policy Studies’Billionaire Bonanza report. It examined the growing concentration of wealth in the US by looking at 15 dynastically wealthy families from the Forbes 400 list and data from the Federal Reserve Survey of Consumer Finance.
But some billionaires are thinking twice about how they’re tackling generational wealth. Bill Gates and Warren Buffett plan to give most of their money away through the Giving Pledge, instead of keeping it in the family.
Buffett has been vocal about his efforts to reduce the vast wealth sitting in the hands of a few influential people. “Dynastic wealth, the enemy of a meritocracy, is on the rise,”Buffett said during a Senate Finance Committee hearing about the federal estate tax 2007. “Equality of opportunity has been on the decline.”