Net worth of American households at 43-year old low

Rick Moran
Yes, but we've got 4 more years to get it right...or something.

The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.

According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.

According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7 percent to 37.1 percent. The "less than $10,000″ figure includes the numerous households that have no assets at all, or "negative assets," which is otherwise known as "debt."

Over that same period of time, the wealthiest 1 percent of American households increased their average wealth by 71 percent.

As noted by Daily Finance, from 1983 to 2010 the share of total wealth held by the richest 10 percent of American households increased from 68.2 percent to 76.7 percent. Meanwhile, all the rest of Americans lost financial ground.

An August Pew Research Center study found that many in the middle-class are divided on how they believe his gap widened.

Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62 percent say "a lot" of the blame lies with Congress, while 54 percent say the same about banks and financial institutions, 47 percent about large corporations, 44 percent about the Bush administration, 39 percent about foreign competition and 34 percent about the Obama administration.

Just 8 percent put "a lot" of blame on the middle class itself.

So who is at fault and what's to be done about income inequality - if anything?

The notion that "a rising tide lifts all boats" is demonstrably false. Middle Class wages have stagnated over the last 30 years while the wealth of the top 10% has nearly doubled, even while the economy has also doubled in size.

Part of this is a function of losing our manufacturing base. Globalization has also played a role. The question shouldn't be whether the government must address income inequality so much as how we must revitalize our industrial sector and create Middle Class jobs again.

All government can do is take from the rich and give to the Middle Class. This presupposes a shrinking or stagnant pie. Grow the pie - but create policies that target the Middle Class. Improve education and training; give tax breaks to home grown manufacturing industries that show innovation and an ability to compete; remove the tangle of unnecessary regulations that stand in the way of business creation and job growth; and assist small business in selling overseas.

We are doing some of this now, but it's not enough and it's a scattershot approach. I have always opposed an "industrial policy" but perhaps, in a world where we must be competitive on a global scale, some kind of concerted effort by government to create the conditions where manufacturing busineses and their workers can thrive is necessary.

CEO's of large corporations will still make tens of millions of dollars a year. But incomes for the Middle Class just might start rising again. That is much preferred to the stagnation we have today.


Yes, but we've got 4 more years to get it right...or something.

The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.

According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.

According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7 percent to 37.1 percent. The "less than $10,000″ figure includes the numerous households that have no assets at all, or "negative assets," which is otherwise known as "debt."

Over that same period of time, the wealthiest 1 percent of American households increased their average wealth by 71 percent.

As noted by Daily Finance, from 1983 to 2010 the share of total wealth held by the richest 10 percent of American households increased from 68.2 percent to 76.7 percent. Meanwhile, all the rest of Americans lost financial ground.

An August Pew Research Center study found that many in the middle-class are divided on how they believe his gap widened.

Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62 percent say "a lot" of the blame lies with Congress, while 54 percent say the same about banks and financial institutions, 47 percent about large corporations, 44 percent about the Bush administration, 39 percent about foreign competition and 34 percent about the Obama administration.

Just 8 percent put "a lot" of blame on the middle class itself.

So who is at fault and what's to be done about income inequality - if anything?

The notion that "a rising tide lifts all boats" is demonstrably false. Middle Class wages have stagnated over the last 30 years while the wealth of the top 10% has nearly doubled, even while the economy has also doubled in size.

Part of this is a function of losing our manufacturing base. Globalization has also played a role. The question shouldn't be whether the government must address income inequality so much as how we must revitalize our industrial sector and create Middle Class jobs again.

All government can do is take from the rich and give to the Middle Class. This presupposes a shrinking or stagnant pie. Grow the pie - but create policies that target the Middle Class. Improve education and training; give tax breaks to home grown manufacturing industries that show innovation and an ability to compete; remove the tangle of unnecessary regulations that stand in the way of business creation and job growth; and assist small business in selling overseas.

We are doing some of this now, but it's not enough and it's a scattershot approach. I have always opposed an "industrial policy" but perhaps, in a world where we must be competitive on a global scale, some kind of concerted effort by government to create the conditions where manufacturing busineses and their workers can thrive is necessary.

CEO's of large corporations will still make tens of millions of dollars a year. But incomes for the Middle Class just might start rising again. That is much preferred to the stagnation we have today.