As usual, the rich get richer.
(you right-wing trolls will have a hey-day with this one; won't you?
I'll be 'amused' to read your responses.)
http://www.epinet.org/newsroom/releases/2006/08/SWApr-wealth-200608-final.pdf
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-More-
NEWS FROM EPI
FOR IMMEDIATE
RELEASE
Tuesday AM
August 29, 2006
CONTACT
Nancy Coleman
Karen Conner
Stephaan Harris
202-775-8810
news@epi.org
WEALTH FLOWS TO THE WEALTHIEST AS THE PERCENTAGE OF
AMERICANS WHO OWN STOCK FALLS
Growing share of households face inadequate retirement income;
Personal debt reaches new high
For a family, wealth is synonymous with security. The ability to
accumulate assets - whether to
pay for education, buy a home, finance retirement, or to provide a
shock absorber for life's
inevitable bumpy roads - is fundamental to safeguarding and improving
living standards over the
years. But in America today, wealth and its benefits are becoming
increasingly concentrated
among the wealthiest few and further out of reach for everyone else.
The bright spot is the
historic rise in home ownership rates since the mid-1990s.
The Economic Policy Institute's forthcoming book The State of Working
America 2006/2007
(SWA) examines in detail the data and trends in net worth, asset
ownership, and household debt
in a chapter on wealth and its distribution, which is being released
today in advance of the Labor
Day weekend release of the rest of the book. EPI economist Sylvia
Allegretto is the principal
author of this chapter, which is based on new analysis of the latest
(2004) data from the Survey of
Consumer Finances by one of the nation's foremost experts on
household income and wealth,
Edward N. Wolff, who is an economics professor at New York University.
More Wealth Flowed to the Top
While the distribution of income and wages has become increasingly
unequal, the distribution of
wealth has become even more so. The authors point out that in 2004,
about 17% of all income
nationwide went to the top-earning 1%, while the bottom 90% received
just under 58% of all
income. That same year, however, the top 1% held over 34% of all net
worth, while the bottom
90% held a little under 29% of net worth.
The wealth disparity has grown over time. In the early 1960s, the
wealthiest (top 1%) Americans
held 125 times the wealth of the typical (median) household; in 2004
the wealthiest held 190 time
more. In dollar terms, the disparities are clear. Between 2001 and
2004, average wealth grew by
$1.2 million (about 3% per year) for the wealthiest 1%, raising their
average wealth holdings to
about $15 million. Wealth for an average household (the middle fifth)
grew only about 0.8% per
year to reach an average of about $82,000 in 2004. Meanwhile those at
the bottom of the wealth
distribution (the bottom fifth) fell farther behind, as their average
wealth fell from -$8,700 in
2001 to -$11,400 in 2004 - as they owe more than they own.
Many households have little or negative wealth. About 30% of households
had wealth holdings
valued at less than $10,000 and for 17% wealth holdings were zero or
negative.
Home Ownership: a Bright Spot
The one area of most consistent good news is home ownership. In 2005,
nearly 69% of
households owned their own homes, a significant increase over the 64%
ownership rates of a
decade ago. Since 1999, the most dramatic increases came for Hispanics,
whose home ownership
grew to 49.5% or by 4 percentage points in 2005. White home ownership
rates increased 2.2
percentage points since 1999 and were 72.7% in 2005. Over the same time
period, rates increased
by 1.9 percentage points to 48.2% for blacks. Hispanic home ownership
surpassed that of blacks
for the first time.
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The Economic Policy Institute is an independent, nonprofit, nonpartisan
research
institute - or "think tank" - that researches the impact of
economic trends and policies
on working people in the United States and around the world.
Taking Stock of Stock Ownership
It probably would surprise a lot of people to know that less than half
of American households are
invested in the stock market in any form--either directly or indirectly
through mutual funds or
401(k)s. The percentage of households that own stock declined from
51.9% in 2001 to 48.6% in
2004 - the first decline recorded. Furthermore, the percentage of
households with more than
$5,000 in stock fell from 40.1% to 34.9%--the first decline in this
share.
Stock ownership remains concentrated among the wealthiest households.
The wealthiest 20% of
households own over 90% of all stock value. For the top 1%, the average
value of stock holdings
was $3.3 million in 2004, down from $3.8 million in 2001. The average
value of stock holdings
for the middle 20% was $7,500 in 2004, down from $12,000 in 2001.
"The typical American family relies on home ownership and home equity
for their financial
security, not the stock market," said EPI economist Sylvia
Allegretto, the principal author of this
chapter.
Red Ink Rises
A key finding regarding the other side of the wealth ledger -
liabilities - is that household debt
has continued its upward trend. Since the early 1980s debt has grown
significantly as a
percentage of disposable personal income, and steep increases have
occurred since 2000. In 1982
debt was 67% of disposable personal income; by 2000 it was 102% and in
2005 it reached an all
time high of 132%.
Debt consumes a growing share of household income - up from 12.9% in
2001 to 14.4% in 2004.
Middle income households spent close to a fifth (19.4%) of their income
paying down debt in
2005, an increase of 2.3 percentage point since 2001.
Black-white Differences
The racial divide of wealth by race is stark. In 2004, the median
wealth of black households was
just one-tenth that of white households, $11,800, compared to $118,300.
While 13% of white
households had zero or negative net worth, over 29% of black households
were in that category.
Although home ownership rates have increased for blacks, they still lag
considerably behind
whites: 72.7% for whites in 2005 compared to just 48.2% for blacks.
Retirement-ready?
Among retirement experts, it is widely accepted that to live adequately
in retirement requires
income from all sources - including Social Security, pensions,
401(k)s and other investments, and
savings - that adds up to about half as much income as during the
working years. Wolff's
analysis, which includes Social Security benefits, shows that more than
one-quarter (27.2%) of all
households nearing retirement (ages 47-64) are expected to fall short
of that minimum. Just over
24% of white households fall short, compared to 39% of black and
Hispanic households.
Wolff notes that the picture has improved over time - in 1989 the
percentage falling below the
minimum for adequate retirement income was 30.5%, compared to 27.2% in
2004. Yet the
prospect that more than one out of every four baby boom households
faces considerably reduced
living standards in retirement presents a major policy challenge.
....and the rest of us just keep getting downsized, and pay a higher
cost of living.
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