Confirming the further redistribution of wealth upward
A new Congressional Research Service report by Linda Levine is the first update on the distribution of wealth (including that of the top 1 percent) I’ve seen based on the recently released Federal Reserve Board (FRB) data on wealth for 2010. Levine’s analysis (see two of her tables below) shows a large upward change in the distribution of wealth over 2007-2010, with losses in the bottom 90 percent and large gains for the top 10 percent. Specifically, the bottom 90 percent in 2010 had just 25.4 percent of all wealth, down from 28.5 percent in 2007. The gainers were primarily those in the 90-to-99th percentiles (up 2.3 percentage points) of wealth, though the top 1 percent saw gains (up 0.7 percentage points) too. Levine’s data goes back to 1989 and show the wealth share of the bottom 90 percent to be at its lowest in 2010, far lower than the 32.9 percent share in both 1989 and 1992.
Levine reports data directly from the FRB showing that average wealth is down from 2007 but still far greater in 2010 ( $498,800) than in 1989 ($313,600) or 1992 ($282,900). In contrast, the wealth of the median household (wealthier than half of households but less wealthy than the other half) in 2010 was $77,300, not much different than in 1989 ($79,100) or 1992 ($75,100). In other words, wealth grew 59 percent from 1989 to 2007, but the typical household’s wealth was actually 2 percent less.
This is yet another dimension of the same old story about the economy being able to provide for most people but failing to do so, a story that will be told more fully in the forthcoming State of Working America (being released in late August). The new edition will include a more detailed report on wealth distribution from 1962 to 2010, based on an analysis by New York University’s Edward Wolff (see the last report, written by Sylvia Allegretto).