A new EPI paper finds that the distribution of wealth in the United States is even more unequal than the distribution of wages or income. The paper, which comes on the heels of another EPI report showing that wage growth in the United States has fallen far behind productivity growth, offers another indication of how the typical worker lacks economic security.
Top 5% holds 63.5% of the country’s wealth
Wealth, or net worth, refers to an individual’s or a family’s total assets, such as bank account balances, savings, and real estate, minus total liabilities, such as mortgages, debt, and outstanding medical bills. Along with wages and income, wealth is another key measure of economic security and well-being since it strengthens a family’s ability to withstand job loss or other economic distress. In the report The State of Working America’s Wealth, EPI Research Associate and U.C. Berkeley Labor Economist Sylvia Allegretto shows that wealth distribution is highly unequal, with the top 5% of U.S. households holding 63.5% of the country’s total wealth in 2009.
Allegretto notes that foreclosures and falling housing values have devastated the net worth – or wealth – of millions of American households. The vastly unequal wealth distribution seen today, she notes, explains why the economic recovery feels different to different people: “Typical workers and families continue to struggle against high rates of unemployment, stagnating wages, and foreclosure, while the wealthy have enjoyed significant gains in the stock market, and benefited from corporate profits.”
Another recent EPI paper, The Sad but True Story of Wages in America by EPI President Lawrence Mishel and Economist Heidi Shierholz, recasts the recent debate over public sector compensation by showing that wages in both the public and the private sector have fallen far behind gains in U.S. productivity in recent decades. Between 1989 and 2010, U.S. productivity grew by 62.5%, but wages grew by a much lower 12% for both private sector and state/local government workers. The failure of pay to keep up with productivity growth has affected both high school and college graduates, and has persisted through periods of strong economic growth in recent decades.
U.S. farmworkers not benefiting from agricultural exports
One quarter of all the fresh fruit produced in the United States, along with almost one-tenth of the vegetables, is exported. On March 21, EPI published Farm Exports and Farm Labor, which finds that although agricultural exports are “a significant and growing force” in the U.S. economy, most farmworkers are not benefiting. Between 1989 and 2009, the value of U.S. agricultural exports has far more than doubled, but over the same 20-year time period, average inflation-adjusted hourly earnings for U.S. farmworkers rose only $1.52, to $10.07 (in 2009 dollars). The paper explores how higher wages could lift many farmworkers out of poverty and increase U.S. household spending.
Featured EPI board member
EPI recently elected six new board members including Joseph T. Hansen (pictured). Hansen is international president of United Food and Commercial Workers Union (UFCW), and has worked as a union activist for four decades, organizing workers to secure middle-class wages, benefits and respect on the job. Hansen began his career as a meat cutter in Milwaukee, Wisconsin, while also serving as a volunteer organizer for his local union He was elected to serve as UFCW’s international secretary-treasurer in 1997 and international president in 2004. Watch for announcements of other new board members in upcoming newsletters.
Please join EPI Board Member and AFL-CIO President, Richard Trumka and Nobel Prize-winning economist Joseph Stiglitz, for a presentation and discussion of Exiting from the Crisis, a volume of essays by global trade union leaders and economists on a more just and sustainable model of global economic growth.
This event will be held on April 15, from 11:00 a.m. to 1:00 p.m. at AFL-CIO headquarters:
815 16th St., N.W.,Washington, DC
To attend, please RSVP to Sherri Close at firstname.lastname@example.org or 202-637-5216.
EPI in the News
—CNN Money cited research from Economist Heidi Shierholz in a story about long-term unemployment and the pros and cons of layoffs versus furloughs.
—The Pittsburgh Post-Gazette cited Shierholz’ research on the jobs hole left in the wake of the Great Recession and the 11.3 million jobs needed in the United States to return to pre-recession levels of unemployment.