Thursday, April 25, 2013
Pew: 93% of households lost net worth 2009-11
Story originally appeared on USA Today.
WASHINGTON (AP) — The richest Americans got richer during the first two years of the economic recovery while average net worth declined for 93% of the nation's households, the Pew Research Center said Tuesday.
The Pew report says wealth held by the richest 7% of households rose 28% 2009 through 2011, while the net worth of the other 93% of households dropped 4%.
Pew says the main reason for the widening gap is that affluent households have stocks and other financial holdings that increased in value, while the less wealthy have more of their assets in their homes, which haven't fully regained their value since the housing downturn.
The upper 7% of households owned 63% of the nation's household wealth in 2011, up from 56% in 2009, said the report, which analyzed Census Bureau data released last month.
Tuesday's report is the latest to point up financial inequality that has been growing among Americans for decades, a development that helped fuel the Occupy Wall Street protests.
A September Census Bureau report on income found that the highest-earning 20% of households earned more than half of all income the previous year, biggest share in records kept since 1967. A 2011 Congressional Budget Office report said incomes for the richest 1% soared 275% between 1979 and 2007 while increasing just under 40% for the middle 60% of Americans.
Other details of Tuesday's report:
—Overall, the wealth of American households rose by $5 trillion, or 14%, during the period to $40.2 trillion in 2011 from $35.2 trillion in 2009. Household wealth is the sum of all assets such as a home, car and stocks, minus all debts.
—The average wealth of the 8 million households in the most affluent 7% rose to an estimated $3.2 million from an estimated $2.5 million, while the average net worth of the 111 million households in the less affluent 93% fell to roughly $134,000 from $140,000.
—The upper 7% were the households with a net worth above $836,033 and the 93% represented households whose worth was at or below that. Not all households among the 93% saw a decline in net worth, but the average declined for that group.
—On an individual household basis, the average wealth of households in the more affluent group was almost 24 times that of those in the less affluent group in 2011. At the start of the recovery in 2009, that ratio was less than 18 to 1.
—During the study period, Standard & Poor's 500 stock index rose 34%, while the Standard & Poor's/Case-Shiller index for home prices fell 5%.