November 6, 2015

Real Economics: Wealth

Michael Snyder, Activist Post:  24 percent of all Americans have more credit card debt than emergency savings.

At this point, approximately 62 percent of all Americans are living paycheck to paycheck.

Adults under the age of 35 inthe United States currently have a savings rate of negative 2 percent.

According to research conducted by Atif Mian of Princeton University and Amir Sufi of the University of Chicago Booth School of Business, 40 percent of Americans could not come up with $2000 right now without borrowing it.
A different study discovered that less than one out of every four Americans has enough money stored away to cover six months of expenses.

Truthout - A recent Bankrate poll found that almost two-thirds of Americans didn't have savings available to cover a $500 repair bill or a $1,000 emergency room visit.

A related Pew survey concluded that over half of U.S. households have less than one month's income in readily available savings, and that all their savings -- including retirement funds -- amounted to only about four months of income.

And young adults? A negative savings rate, as reported by the Wall Street Journal. Before the recession their savings rate was a reasonably healthy 5 percent.

Between 2007 and 2013 median wealth dropped a shocking 40 percent, leaving the poorest half with negative wealth (because of debt), and a full 60% of households owning, in total, about as much as the nation's 94 richest individuals.

People of color fare the worst, with half of black households owning less than $11,000 in total wealth, and Hispanic households less than $14,000. The median net worth for white households is about $142,000.

Food costs have doubled since 1978, housing has more than tripled, and college tuition is eleven times higher. The cost of raising a child increased by 40 percent between 2000 and 2010. And despite the gains from Obamacare, health care expenses continue to grow.

Median household income has been going down since 2000, with the greatest drop occurring since 2009, as 95 percent of the post-recession income gains have gone to the richest 1%.

The jobs that kept the middle class out of poverty -- education, construction, social services, transportation, administration -- have seen a decline since the recession, especially in the northeast. At a national level jobs gained are paying 23 percent less than jobs lost.

The lowest paid workers, those in housekeeping and home health care and food service, have seen their wages drop 6 to 8 percent (although wages overall rose about 2 percent in 2014).

Over half of public school students are poor enough to qualify for lunch subsidies. There's been a 70 percent increase since the recession in the number of children on food stamps. State of Working America reported that almost half of black children under the age of six are living in poverty.
According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

Pensions & investments - More than half of all American households do not have enough put away for retirement, and the problem is getting worse, said new research from the Center for American Progress.
Along with tracking what people are putting away for retirement, the researchers looked at dozens of studies by government, academic and private-sector organizations that model how likely people are to fall short when they retire. The most convincing estimates project that more than 50% of households will fall short, and even the most optimistic studies predict that nearly one-quarter of retirees will, CAP researchers found.

As of 2013, the top 20% of working-age households by income held 67.7% of all retirement assets, while the bottom 50% held 7.4% of assets.

Roughly 31% of Americans have no retirement savings and no access to defined benefit plans, according to Federal Reserve data, including 19% of people ages 55 to 64. Of the 65% of private-sector workers with access to workplace retirement plans, only 48% participated in one in 2014.

Activist Post -American families in the middle 20 percent of the income scale have a lower net worth than they did on the day when Barack Obama first entered the White House.

At this point, one out of every three adults in the United States has an unpaid debt that is "in collections".

According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

The median wealth for high-income families was $639,400 last year — up 7% from three years earlier on an inflation-adjusted basis. For middle-income families, the median wealth — that is, assets minus debts — stood at $96,500 last year, unchanged from 2010. The result is that the typical wealth of the nation's upper-income households last year was nearly seven times that of middle-class ones. By Pew's calculations, that is the biggest gap in the 30 years that the Fed has been collecting statistics from its Survey of Consumer Finances.


Truth Out In 2005, for every $1 of financial wealth there was 66 cents of non-financial (home) wealth. Ten years later, for every $1 of financial wealth there was just 43 cents of non-financial (home) wealth.

Oxfam reported that just 85 people own as much as half the world. Here in the U.S., with nearly a third of the world's wealth, just 47 individuals own more than all 160 million people (about 60 million households) below the median wealth level of about $53,000.

The upper middle class in the U.S., defined as everyone in the top half below the richest 20%, owns 11.9 percent of the wealth. Indonesia at 10.5 percent and Russia at 7.5 percent are worse off, but in all other nations the corresponding upper middle classes own 12 to 27 percent of the wealth.

This chart shows the percentage of wealth owned by the top 0.1 percent of Americans over the past century. Note that the decline started with the New Deal and the reversal began with the Reagan administration

Washington Post - The median net worth of American households declined between 2000 and 2011, the Census Bureau said in a report that showed the steepest drops experienced by minorities and people under age 55. The wealth drop in the bottom 60 percent was so great that it more than offset healthy increases in the net worth of the top 40 percent. As a result, median household net worth for the nation as a whole fell by more than $5,000 over a little more than a decade, a decline of almost 7 percent.

Center for Economic & Policy Research - A NYT article reported on a study from Russell Sage reporting that median household wealth 36 percent lower in 2013 than 2003. While this is disturbing, an even more striking finding from the study is that median wealth is down by around 20 percent from 1984.

The top 5% of Americans averaged 24 times as much wealth as the wealth of the median American family in 2013; in 2007 they averaged 17 times as much.

NY Times - The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets.

1 comment:

Anonymous said...

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rather than paying interest to the banks

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