Pew: Wealth Declines for 93% of Households

May 7th, 2013
in econ_news, syndication

Econintersect:  The U.S. Census Bureau released the data for income and wealth distributions through 2011 in March and the Pew Foundation produced a wealth distribution analysis report 21 April 2013.  The bottom line of the Pew study:  From 2009 to 2011 the top 7% gained 28% increase in wealth, while the remaining 93% lost 4% of their wealth as a group.  A major factor producing the large difference was the much greater ownership of financial assets for the high wealth group combined with a relatively greater ownership of real estate assets by the lower 93%.

Click on graphic for larger image.


Follow up:

Pew reported summary data for the top 13% (above $500,000 net worth) and for the remaining 87%.  Pew-net-worth-2009-2011The numbers reported are shown in the following table on the left.

The shape of the distribution is indicated by two factors.

First, the mean (average) is much larger than the median.  This indicates that there is a very high net worth tail for the wealth distribution.

Secondly, the fact that the mean increased by 21% while the mean declined by 6% indicates that the gains in net worth went to the higher regions of the top 13%.

See this report for some basic discussion of wealth and income distributions.

The following table from the Pew report gives additional perspective.

Click on table for larger image.


Someone who stops with the top line would think that the recovery might be progressing at least moderately well, with a 14% gain in household net worth 2009-2011.  But all middle class and lower households actually lost net worth; all the gain went to the top 13%.

But the above numbers are actually an overly rosy assessment.  With a different slicing of the data the top 7% was found to have an increase in net worth of 28% and the bottom 93% saw a decrease of 4%.



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