Science

The 3 million richest Americans have a combined wealth of over 291 million

America’s current economic crisis draws comparisons to the 1980s—another era with skyrocketing inflation, rising interest rates, and troubled financial markets, not to mention the taste of heavy eye makeup.

But according to a new analysis from the Congressional Budget Office, most Americans today are much worse off financially than they were three decades ago.

In 1989, the year “The Simpsons” first aired, the poorest 50% of Americans owned 4% of the nation’s net worth. The CBO found that thirty years later, his share of the wealth had dropped to 2%. For the middle and upper-middle class – households between 50% and 90% of the income distribution – the slice of the pie rose to 26% in 2019, up from a third three decades ago.

In contrast, the top 10% of income-earners have increased their share and now account for two-thirds of the total wealth in the US, with most of the gains concentrated in the top 1%.

Another way to think about it: The 3 million people who make up the richest 1% of Americans are collectively worth more than the 291 million who make up the bottom 90%. The disparity would be even greater if the report only counted marketable money and ignored the benefits of defined-benefit payments such as pension plans or Social Security, the CBO noted.

The report was requested by Senator Bernie Sanders, a Vermont independent who made rising inequality the centerpiece of his two presidential campaigns.

“We live in a society where the people at the top, the billionaires, are doing great, and the working people are falling back and forth,” Sanders told CBS Mornings.

“There has been a massive redistribution of wealth over the past 50 years,” he said. “We’re talking about going to 1% of trillions of dollars while the working and middle classes become poorer.”

The country’s changing financial fortunes underscore deep structural changes in the economy as the US loosened trade, largely eliminated pensions, cut higher-education funding and reduced union membership to historic lows. saw.

According to the CBO, home equity, which is a springboard for working-class people to achieve upward mobility, played a relatively minor role for the wealthiest. Instead, the largest contributors to upper-sector wealth were trading equities, investment real estate, financial securities and legacy trusts, the CBO found.

For Americans in the 51st-to-90th percentile of income, retirement funds such as 401(k)s or IRAs consistently make plans. As a share of the wealth has increased since 1989.

Meanwhile, for the poorest half, wealth stagnated between 1989 and 2007 and fell during the Great Recession, which wiped out trillions in home equities. Since the housing crash, even the poorest 25% have gone into debt. Today, the bottom 30 million households are each worth less than $18,000, most of whom have negative net worth, meaning they have more debt than assets.

Biggest Form of Debt: Student Loans

Thirty years ago, the debt of the poorest Americans consisted of mortgages and car loans. However, since 2016, student loans have emerged as their biggest source of debt.

To be sure, the nation’s net worth has increased five-fold since the late 1980s. In terms of raw numbers, the poorest half have more than in the year the Berlin Wall fell.

But that increase hasn’t translated into a higher standard of living for America’s poorest people. An analysis released Wednesday by the Financial Times found that there are some extremely wealthy people in the US and UK, with the poorest Americans doing worse than their European counterparts, lower than their peers in Belgium, Denmark, France, Ireland or with standard of living. Germany.

The FT wrote, “The wealthy in America are extraordinarily affluent – ​​the top 10% have the highest top-tenable disposable income in the world.” “But those in the lower strata struggle with a standard of living that is worse than the poorest of the 14 European countries, including Slovenia.”

“Essentially, the US and UK are poor societies with some very wealthy people,” the FT said.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button