Home > upward income and wealth redistribution > Household wealth trends in the United States, 1962-2013

Household wealth trends in the United States, 1962-2013

from David Ruccio

mean-median-net worth

The chart comes from Ed Wolff’s latest, “Household Wealth Trends in the United States, 1962-2013: What Happened over the Great Recession?”—another in a growing list of investigations into the declining fortunes of the American middle-class.

Two trends can be seen in this chart: first, the enormous growth in mean net worth from 1983 to 2013 (after the post-2007 dip); and, second, the much slower growth in mean net worth through 2007, and the decline from then to 2013.

On the first, Wolff explains,

Between 1983 and 2013, the top one percent received 41 percent of the total growth in net worth, 43 percent of the total growth in non-home wealth, and 49 percent of the total increase in income. The figures for the top 20 percent are 99 percent, 98 percent, and 103 percent, respectively – that is to say, the upper quintile got it all!

As for the second, Wolff’s interpretation of the evidence is that, even with the rise in housing prices through 2007, the net worth of middle-class households rose very slowly because, with stagnant incomes, they expanded their debt in order to finance normal consumption expenditures (rather than to increase their investment portfolios). And that same income stagnation continued over both the 2007-2010 and 2010-2013 periods, which forced the middle-class to engage in significant dissaving to maintain its previous levels of consumption.

The result is that, while real mean net worth rose 67.4 percent from 1983 to 2013 (even after a sharp drop after 2007), real median net worth actually declined by 18.2 percent over the same period (which, in percentage terms, fell much more than the mean after 2007).

Right now, the American middle-class is stuck between the rock of stagnant incomes and the hard place of stagnant net worth. And it doesn’t look like that’s going to change anytime soon.

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