The OccupyWallStreet movement has succeed in forcing the media to acknowledge the extent and seriousness of income inequality. In many ways wealth inequality is a bigger problem since it is wealth that largely underpins income and power differences. According to an Economic Policy Institute posting,
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.
It is worth dividing the top 5% into what has now become two familiar groups, the top 1% and the next 4%. As the chart below shows, the top 1% of households captured 40% of all the growth in wealth over the period 1983 to 2009. The next 4% gained 41.5%.
Putting these trends into dollars, households in the top 1% gained an average of $4.5 million in wealth and households in the next 4% gained an average of $1.2 million over the period. It is worth restating that those are just their gains. How does your existing wealth stack up against their gains?
Comments 2
Yrro Simyarin — October 27, 2011
When we're speaking of wealth and not income, I would love to see those percentages plotted by age.
Someone who has been working a middle class job and making a max contribution to their IRA or 401k their entire life is going to have a drastically different total wealth than someone just graduating college, or growing a family in their 30's, without the associated moral and fairness problems implied by this graph.
That isn't to say that this explains the changes in wealth distribution, or the even the majority of the difference... but a few simulations I've read show it to be a fairly large factor, when we are speaking of wealth only.
LAJ — October 28, 2011
How about looking at the bottom rather than the top? Check out this column by Canadian journalist Andrew Coyne. http://www2.macleans.ca/category/opinion/andrew-coyne-opinion/