It is widely acknowledged that wealth declined substantially between 2007 and 2009 as the housing bubble burst and stock prices fell. This wealth shrinkage was especially hard on the middle class and those groups (such as African Americans) whose house is their primary source of wealth. It is far less appreciated that this is a long-term trend, and that wealth is now lower for the typical household than it was a generation ago in 1983, while the wealth at the upper end expanded a great deal.

The disparity of changes in wealth over the last generation is portrayed in the figure, which shows the shares of the wealth gains for various wealth classes. All of the gains in wealth accrued to the upper fifth, with 40.2 percent of the gains going to the upper 1 percent and 41.5 percent going to the next wealthiest 4 percent of households. This translated to gains of $4.5 million per household in the richest 1 percent and a gain of roughly $1.2 million per household in the next richest 4 percent of households.

In other words, the richest 5 percent of households obtained roughly 82 percent of all the nation’s gains in wealth between 1983 and 2009. The bottom 60 percent of households actually had less wealth in 2009 than in 1983, meaning they did not participate at all in the growth of wealth over this period.