1% gives up ground -- to the 5%
The One-Percenters have done extremely well, but the Five-Percenters have done even better. Meanwhile, the middle class is losing wealth.
This post comes from Robert Frank at partner site CNBC.
A new report shows that the One-Percenters have grown even further removed from the rest of America.
The report, from the left-leaning Economic Policy Institute, shows that the average wealth of the top 1% is now 288 times the median wealth for Americans.
That number is up more than 50% since 2007, up 85% since 1989 and nearly double the levels of 1962. The chart uses Federal Reserve data and analysis from Edward Wolff, the wealth expert and economics professor at New York University.
The study found that the 1% holds 35% of the nation's stocks. Despite talk of the "democratization of stocks" during the 1990s and 2000s, only 31% of Americans have stock holdings worth $10,000 or more.
The takeaway from these numbers seems to be clear: The rich are getting richer at the expense of (or at least despite) the rest of the population. (Post continues below video.)
But there is another chart buried in the report that is equally interesting. It shows that the total share of wealth held by One-Percenters is essentially flat since 2007, at 35%. Their share has fallen since 1989, when they held 37% of the nation's wealth.
Of course, you won't see many headlines that read "Rich hold lower share of nation's wealth." (See "$6 million gets you into the 1% at 40.")
Lawrence Mishel, the president of the Economic Policy Institute and one of the paper's authors, said that the difference between the numbers is largely technical. He said that it depends on which time period you use as a starting point. And the ratio of One-Percenters to the median wealth is more a reflection of the middle class losing wealth than the 1% gaining wealth.
"The middle class has clearly been hammered, so that changes the denominator," he said.
In fact, the group that's done the best in terms of their share of national wealth is the 95th through the 99th percentile, those just below the 1%. Their share has soared from 22% in 1989 to 27% in 2010. (See "The fear and loathing of the 1%.")
So it's true that the 1% has done well. The 5% has done even better. And both have done better than the middle class.
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