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).

 

Tagged

  • benleet

    Average wealth in 2010 for half of U.S. families, $10,973. Average wealth for top 1%, $17,208,000. I hope I did it correctly. I’d like to see a graph of median wealth over time with other lines showing total domestic debt: financial corporate debt, non-financial corporate debt, household debt and government debt. Household debt expanded considerably 2000-2007, financial debt more so. But then the bottom fell out. It would be an interesting picture. Household debt to disposable income ratio jumped from 90% to 130%, 2000-2008. And add to it a graph of wage income as percentage of total income — it fell. State of Working America’s graphs are great. 

  • benleet

    Recently a BBC news report — http://www.bbc.co.uk/news/business-18944097 — on tax-free havens claims that $21 trillion has been “stashed” to avoid taxes. The web newsletter TooMuchonline.org reported on this also — http://www.toomuchonline.org/tmweekly.html  — claiming that the portion of wealth owned by the top 1% is closer to 50% than 34%. This “stashing” of course is most likely illegal tax avoidance. 
    Mishel’s report, a close look shows, that 
    between 1995 to 2010 the percentiles 90 to 99 increased their share of wealth from 33.2% to 40.0% an increase of 6.8%. The top one percent, it says, decreased their share from 34.6% to 34.5% — a decrease of 0.1%. This decrease is very difficult to believe. This finding supports the plausibility that the very richest have “stashed” their additional wealth in places the Federal Reserve cannot find. The Congressional Budget Office report Trends in the Distribution of Income [not wealth] Between 1979 and 2007 finds that the top 1% increased its income, post-taxes and post-transfers, from 8% to 17%, a 9% increase in the size of their “income pie”. A 9% increase equals an increase of over $1 trillion more income annually in the year 2010. ($11.468 trillion time 9%, using Joint Committee on Taxation figure for total personal  income)  All the increase came as a decrease in the share of the lower-earning 80%. So it is just implausible that the wealthiest 1% did not increase the size of their “wealth pie” slice. Unbelievable. At least it’s worthy of an FBI investigation. My blog: http://benL8.blogspot.com