On the Nature of Things | Forum

Pew: 93% of households lost net worth 2009-11
Pauline Jelinek, Associated Press12:50 p.m. EDT April 23, 2013

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%.

Zack Morris wrote:I once heard that a rising tide lifts all boats. The top 7% now have more money to spend and the rest of the 93% should be happy for that.

Zack Morris wrote:I once heard that a rising tide lifts all boats. The top 7% now have more money to spend and the rest of the 93% should be happy for that.

Mr. Perfect wrote:

Zack Morris wrote:I once heard that a rising tide lifts all boats. The top 7% now have more money to spend and the rest of the 93% should be happy for that.

They do seem to be happy with it. They voted for more of it. They are getting what they wanted.

Doc wrote:

Mr. Perfect wrote:

Zack Morris wrote:I once heard that a rising tide lifts all boats. The top 7% now have more money to spend and the rest of the 93% should be happy for that.

They do seem to be happy with it. They voted for more of it. They are getting what they wanted.

Indeed Everyone that voted for Obama should be absolutely delighted by it.

Zack Morris wrote: Finding a high-paying job is easier than it's ever been -- if you have the right skills.

If you don't have the right skills, well, blame the decades-long all-out assault on the labor movement that has gutted labor unions.

Just as standardization of the working week is not a threat to the economy, unless taken to an extreme, neither are the restrictions negotiated by unions on behalf of their members. It's a matter of establishing a workable social contract.

Mr. Perfect wrote:

Zack Morris wrote: Finding a high-paying job is easier than it's ever been -- if you have the right skills.

Hahaha no.

If you don't have the right skills, well, blame the decades-long all-out assault on the labor movement that has gutted labor unions.

I blame the lack of demand for labor. Labor unions do not create demand for labor.

Just as standardization of the working week is not a threat to the economy, unless taken to an extreme, neither are the restrictions negotiated by unions on behalf of their members. It's a matter of establishing a workable social contract.

After 4 years of Obama, 2 of which with near record majorities, how come they never got around to that part. In your own words.

Zack Morris wrote: Obviously, you don't employ skilled workers, else you would realize that engineering/science/math/medical salaries are sky-high right now.

There is indeed a lack of demand for labor, that much is true.

And that's not going to change with or without unions. The question is whether unions could have slowed the bleeding and whether protectionism's costs could have been spread around and sustained by the economy. Unchaining the low end has let the top echelons (top 10%, roughly) soar

The political system has been hopelessly broken for decades. I don't see how such a big issue could have been resolved in 2 years.

Mr. Perfect wrote: There is no relationship. The STPN 1% are doing so well because of STPN. All the money went to the 1%. Nothing to do with unions, one way or the other.

The most successful economic period of all time was the result of a broken political system. Very interesting. Something to think about.

Zack Morris wrote: According to right wing economic theory, it doesn't matter where that money goes. They'll spend it on luxury yachts and caviar and create lots of jobs doing so.

The most economically successful period of the last 100 years was the post-WWII period, for obvious reasons. The early 2000's were not successful -- it was a bubble, very little lasting value was produced (outside of the tech sector), and it was totally unsustainable. It took a hell of a lot longer undoing the prosperity of the late 40's/50's/60's than the Bush years.

noddy wrote:true but not what i was getting at.

this wasnt just america - its the same pattern all through the western world with varying mixes of private or public debt adding up to simmilar levels of hard to sustain payments.

my point was we didnt spend all that money on investment or growth and new industries we spent it on luxuries that dont earn money.

the real prosperity we HAD led to a new kind of credit based prosperity which took off in the 90's ..

Zack Morris wrote:Obviously, you don't employ skilled workers, else you would realize that engineering/science/math/medical salaries are sky-high right now. For the engineering and science folks (and many studying math as well), graduate school is funded and research is salaried, meaning no accumulation of debt. And it isn't all government money -- I was funded entirely by the private sector, save for two research stints abroad, which were government-funded.

Zack Morris wrote:According to right wing economic theory, it doesn't matter where that money goes. They'll spend it on luxury yachts and caviar and create lots of jobs doing so.

Enki wrote:

Zack Morris wrote:Obviously, you don't employ skilled workers, else you would realize that engineering/science/math/medical salaries are sky-high right now. For the engineering and science folks (and many studying math as well), graduate school is funded and research is salaried, meaning no accumulation of debt. And it isn't all government money -- I was funded entirely by the private sector, save for two research stints abroad, which were government-funded.

Zack Morris is correct.

The Great Recession has thus pushed jobless workers into unemployment-duration groups with poor odds of finding work, even after economic recovery. From 2007 to 2011, the fraction of the nation’s unemployed who were unemployed six months or longer increased from 18 percent to 44 percent.

A simple explanation for why workers’ job-finding success drops as the duration of their unemployment rises is that the workers whose skills are in shortest supply will tend to be re-employed fastest. These workers thus tend to leave the unemployment queue before they have been jobless for long. A disproportionate number of the chronically unemployed simply lack skills currently prized by employers.

Enki wrote:

Zack Morris wrote:Obviously, you don't employ skilled workers, else you would realize that engineering/science/math/medical salaries are sky-high right now. For the engineering and science folks (and many studying math as well), graduate school is funded and research is salaried, meaning no accumulation of debt. And it isn't all government money -- I was funded entirely by the private sector, save for two research stints abroad, which were government-funded.

Zack Morris is correct.

Enki wrote:I tell everyone I run across who needs work to learn Javascript and Ruby on Rails.

Mr. Perfect wrote:

Enki wrote:

Zack Morris wrote:Obviously, you don't employ skilled workers, else you would realize that engineering/science/math/medical salaries are sky-high right now. For the engineering and science folks (and many studying math as well), graduate school is funded and research is salaried, meaning no accumulation of debt. And it isn't all government money -- I was funded entirely by the private sector, save for two research stints abroad, which were government-funded.

Zack Morris is correct.

Corporations were paying for engineers' college when I graduated. There is nothing new about it. Zack Morris is incorrect.

Mr. Perfect wrote:

Enki wrote:I tell everyone I run across who needs work to learn Javascript and Ruby on Rails.

Do you tell them also about investing in lawn robots.