We’re not as wealthy as we thought we were

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower.

…“The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001,” said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.

From Anna Bernasek, there is more here.  And background here.

Comments

Fortunately, we’ve got all these unaccompanied Central American adolescents and pregnant women clamoring to get in, which will no doubt do much to fix things.

See, it’s simple arithmetic. If the government lets in extremely poor people equal in number to 25% of the population, that will push households at the 50th percentile up to the 75th percentile, thus making their net worth increase from $56,335 to $260,405, making the average American household more than $200,000 richer.

Seems non-relevant. They weren't here when the problem was starting.

But the audience for nonsense posts by the average gadfly blogger would double.

It gets better. Eventually, the immigrants themselves have children who are accepted as being white, so they too can potentially join iRacist's campaign to drag up the rope ladders, much like the Italians and Irish today!

Econ 101, meet Real Life 101, where people devote strenuous efforts to maintaining their quality of life, often with complete disregard for economists' models of perfect competition.

The Blacks have been here for 400 years and no one excepts them as White. Nor the Native Americans.

Maybe that's because they aren't White.

Actually, if the population increased by 25% with all 0 net worth individuals, the median individual would rise to the 60th percentile. Check your math.

For your numbers to be correct, the population would have to double.

How could his numbers possibly be correct? You urgently need to buy sarcasm detector.

Kyle,

"Actually, if the population increased by 25% with all 0 net worth individuals, the median individual would rise to the 60th percentile. Check your math."

Indeed, check your math. In the new (25% larger) population the median individual would have the same net worth as the 62.5% of the old population (as in considerably lower).

What you are trying to say is that

"The median individual from the old population would now be at the 40% of the new population even though his net worth did not change because of the massive influx of zero net worth people"

Here's a 2011 Pew Hispanic Center report that ought to be eye-opening:

Hispanics: The net worth of Hispanic households decreased from $18,359 in 2005 to $6,325 in 2009. The percentage drop--66%--was the largest among all groups. Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and are more likely to reside in areas where the housing meltdown was concentrated. Thus, the housing downturn had a deep impact on them. Their net worth also diminished because of a 42% rise in median levels of debt they carried in the form of unsecured liabilities (credit card debt, education loans, etc.).

Blacks: The net worth of black households fell from $12,124 in 2005 to $5,677 in 2009, a decline of 53%. Like Hispanics, black households drew a large share (59%) of their net worth from home equity in 2005. Thus, the housing downturn had a strong impact on their net worth. Blacks also took on more unsecured debt during the economic downturn, with the median level rising by 27%.

Whites: The drop in the wealth of white households was modest in comparison, falling 16% from $134,992 in 2005 to $113,149 in 2009. White households were also affected by the housing crisis. But home equity accounts for relatively less of their total net worth (44% in 2005), and that served to lessen the impact of the housing bust. Median levels of unsecured debt among whites rose by 32%.

Asians: In 2005 median Asian household wealth had been greater than the median for white households, but by 2009 Asians lost their place at the top of the wealth hierarchy. Their net worth fell from $168,103 in 2005 to $78,066 in 2009, a drop of 54%. Like Hispanics, they are geographically concentrated in places such as California that were hit hard by the housing market meltdown.

The arrival of new Asian immigrants since 2004 also contributed significantly to the estimated decline in the overall wealth of this racial group. Absent the immigrants who arrived during this period, the median wealth of Asian households is estimated to have dropped 31% from 2005 to 2009. Asians account for about 5% of the U.S. population.

No Assets: About a quarter of all Hispanic (24%) and black (24%) households in 2009 had no assets other than a vehicle, compared with just 6% of white households. These percentages are little changed from 2005.

http://isteve.blogspot.com/2011/07/wealth-gap-hits-new-high.html

All,

This is partially an immigration story but partially a bubble story. In the bubble years, asset prices (houses and stocks) rose rapidly. Much of the bubble was debt fueled (particularly on the housing side). Then the bubble burst and asset prices fell. Of course, the debt was left behind. That combination yields a massive fall in net worth (a huge surprise for a lot of people). Of course, the stock bubble has re-inflated since then (and parts of the housing bubble). Given that stock ownership is much more concentrated than housing ownership, the ongoing fall in median net worth makes all the sense in the world.

During the bubble years I (and many others) regularly decried the massive fall in saving. The general rejoinder was that the U.S. have moved beyond that reality of actual saving, because now we had 'asset-based saving'. In other words, no one (including the U.S. as a whole) needed to save because asset price bubbles were a more than sufficient replacement. No one with even the slightest knowledge of national income accounting would have ever fallen for this BS. However, it was pretty commonplace particularly on Wall Street and in "supply-side" economic circles (and in Bush administration).

Here is quote from Stephen Roach (former Chief Economist for Morgan Stanley) on the subject.

"As asset-based savings increased, the spending side of the U.S. economy still needed to be funded on a cash-accrual basis. That forced America to run massive current account deficits in order to make up for the difference between asset-driven aggregate demand and production-driven income generation. Unfortunately, in a posthousing bubble climate, the asset effects are now swinging the other way—suggesting that national income-based savings measures are likely to become much more meaningful in shaping U.S. aggregate demand than has been the case in a long time."

S. Roach may have been on Wall Street. However, he didn't drink the Kool-Aid.

The other side of the coin is immigration. Crashing wages and employment aren't good for anyone's net worth. Given the huge adverse impact of mass immigration since 2000, why is anyone surprised by the dismal statistics? For some details, see page 9 of “The Financial Outlook for American Families” by William R. Emmons Center for Household Financial Stability, Federal Reserve Bank of St. Louis.

If this graph is correct, median household incomes for “some college”, “high-school diploma”, and “less than high-school” have fallen 15-20% since 2000. Indeed, “bachelor or more” median incomes have fallen 10% from the 2000 peak.

The 1990s upturn did raise incomes… But only slightly above the 1990 level (except for the “bachelor or more” group). All of the (small) gains from the 1990s have been utterly wiped away (and more) since 2000.

These income crashes are so profound and fast that they can not possible be explained by a change in the composition of the work force (more low wage immigrants). A closely related point is that immigrant incomes are falling (apparently). See “Why Hispanics are Natural Democrats and what the GOP can do about it” (http://super-economy.blogspot.com/2012/11/why-hispanics-are-natural-democrats-and_12.html). Hispanic family income as a percentage of white family income has fallen dramatically (from 70% to 60%) since 1972.

Another data point tells the same story. See “Los Angeles and its Immigrants – Metropolis Web Site” (http://bit.ly/qJTsbP). A few quotes

“Consequently, the terms of compensation at the bottom of L.A.’s economy got worse over the past two decades: between 1970 and 1990, real earnings in the Mexican immigrant industrial niches declined by over $6,000. The downturn is not simply a matter of exchanging bad jobs for worse: real earnings also declined in all of the industries that served as Mexican niches in 1970, before the massive immigration truly began.”

“Ten years after their arrival in the United States, the immigrants of the 1970s are doing worse than were the immigrants of the 1960s at the same point in time. And all cohorts have seen the gap separating them from natives grow — a statement that remains true both before and after adjusting for differences in background characteristics.”

As the above data points show, changes in labor force composition (from immigration) can’t begin to explain falling incomes. However, the broader effects of immigration will easily suffice. Since 2000, the dominant effect of immigration has been to drive Americans out of the labor and reduce their incomes to zero. Since we are talking about medians, reducing group incomes to zero has a large effect.

What has happened? Since 2000, the U.S. has had marginal employment growth. 100% of the employment gains have gone to immigrants even though the (potential) native labor force has grown faster than immigration. As a consequence native LFP and the EMPR (employment population ratio) have plunged. That shows up as plunging median incomes. Open Borders is that pet obsession of the cheap labor right and race based left. Americans pay a fearful price for it.

See ” All Employment Growth Since 2000 Went to Immigrants – Number of U.S.-born not working grew by 17 million” http://cis.org/all-employment-growth-since-2000-went-to-immigrants

Government data show that since 2000 all of the net gain in the number of working-age (16 to 65) people holding a job has gone to immigrants (legal and illegal). This is remarkable given that native-born Americans accounted for two-thirds of the growth in the total working-age population. Though there has been some recovery from the Great Recession, there were still fewer working-age natives holding a job in the first quarter of 2014 than in 2000, while the number of immigrants with a job was 5.7 million above the 2000 level.

All of the net increase in employment went to immigrants in the last 14 years partly because, even before the Great Recession, immigrants were gaining a disproportionate share of jobs relative to their share of population growth. In addition, natives’ losses were somewhat greater during the recession and immigrants have recovered more quickly from it. With 58 million working-age natives not working, the Schumer-Rubio bill (S.744) and similar House measures that would substantially increase the number of foreign workers allowed in the country seem out of touch with the realities of the U.S. labor market.

Three conclusions can be drawn from this analysis:

First, the long-term decline in the employment for natives across age and education levels is a clear indication that there is no general labor shortage, which is a primary justification for the large increases in immigration (skilled and unskilled) in the Schumer-Rubio bill and similar House proposals.

Second, the decline in work among the native-born over the last 14 years of high immigration is consistent with research showing that immigration reduces employment for natives.

Third, the trends since 2000 challenge the argument that immigration on balance increases job opportunities for natives. Over 17 million immigrants arrived in the country in the last 14 years, yet native employment has deteriorated significantly.

It is worth noting that both types of insanity (Open Border and 'asset-based saving') came out of supply-side / libertarian circles. This should be a warning to anyone who takes libertarian ideology seriously. It is a formula for societal failure.

Keep in mind that the Sand State (CA, AZ, NV, FL) Housing Bubble was also a Hispanic Population Bubble, a bet on the credit-worthiness rapidly growing Hispanic population, as Countrywide CEO Angelo Mozilo repeatedly pointed out in 2003-2006.

Not sure the math matters to your point, but I think your math is off. If you have a country of 100 households and let in either 25 or 33 new households (not sure which you meant by equal to 25% of the population) to the very bottom, the median household goes to either 75/125 or 83/133, neither of which are the 75th percentile.

What is the increase in wealth at the too minus the decrease in wealth at the bottom?

Hypothesis1: supply of the bottom 95% increased relative to the supply of what the top 5% produces.
Hypothesis 2: yes, this means immigration matters. But it is swamped by globalization.

You can test your hypothesis and discover that it is false.

Take the initial period, find the number of illegal aliens relative to the total population, and measure the change from the initial period to date, if you are using immigration as the explanatory variable, you would be looking at the change in immigration from 2001 to date, divided by the total US population.

Then, come back and explain how you can claim the delta in immigration over the entire population explains the change in wealth and income.

Good luck.

Or, if you want to look at it a different way: ask yourself this question: what sectors of the economy are illegal aliens supplying their labor: likely, places like restaurants, hotels, farms, roofing. siding, lawn care.
Do you think these occupations have declined in wages from already low levels that would explain the decline in income.

I do agree that globalization matters, but am more skeptical about the delta of immigration since 2001 as being the cause, given that immigrants stay in jobs where there is little monitoring of legal status (cooks, farm labor, roofing) which are areas that do not much of the total non-immigrant workforce.

By the way, if you are concerned about illegal immigration depressing wages, please consider a national ID and citizenship card which could be issued by your local police department. Please present your birth certificate, be prepared to list your grade school and parents address in 8th grade or similar questions, and be willing to have your eyes scanned and fingerprints taken.

Legal immigration depresses wages as well.

Nation-states have for centuries required that you be able to give an account of yourself and present your bona fides. If you couldn't, you were considered a vagrant or a spy and kicked out.

Passports (as distinct from paperwork carried by diplomats and other such officials) are a fairly recent innovation. For most of history there were no "papers", and no formal ID (and until the mid 20th century assuming a new identity was as easy as just renaming yourself and moving somewhere where no one knew you).

*chinese man moves to paris*
HEY MY NAME IS PIERRE! HOW YA DOIN!

Bill,

The issue is immigration, not illegal or legal immigration. Quote from a prior post.

"See ” All Employment Growth Since 2000 Went to Immigrants – Number of U.S.-born not working grew by 17 million” http://cis.org/all-employment-growth-since-2000-went-to-immigrants

Government data show that since 2000 all of the net gain in the number of working-age (16 to 65) people holding a job has gone to immigrants (legal and illegal). This is remarkable given that native-born Americans accounted for two-thirds of the growth in the total working-age population. Though there has been some recovery from the Great Recession, there were still fewer working-age natives holding a job in the first quarter of 2014 than in 2000, while the number of immigrants with a job was 5.7 million above the 2000 level.

All of the net increase in employment went to immigrants in the last 14 years partly because, even before the Great Recession, immigrants were gaining a disproportionate share of jobs relative to their share of population growth. In addition, natives’ losses were somewhat greater during the recession and immigrants have recovered more quickly from it. With 58 million working-age natives not working, the Schumer-Rubio bill (S.744) and similar House measures that would substantially increase the number of foreign workers allowed in the country seem out of touch with the realities of the U.S. labor market."

The number of Americans with a jobs (16 - 65) has fallen. Labor Force Participation and the EMPR (EMployment Population Ratio) have plunged. The number of working age Americans has risen dramatically. More than 100% of the job gains (minimal as they are) have gone to foreigners.

Net worth has plunged. The math here just isn't that hard.

Peter,

That really doesn't tell me much.

An Indian software engineer is not equal to a farm worker. There are some immigrants whose services are in demand, or, as graduate students in the US, would make as much a contribution as any other graduate student.

I think you need to distinguish legal from illegal immigration, and immigration in segments that provide high demand services and skills.

From the National Journal:

"Hispanic men and women made up about 16 percent of the U.S. population in 2010, and held $1.4 trillion dollars of overall wealth. That’s just 2.2 percent of the nation’s income, property, and financial assets, according to the report."

The Hispanic population grew from 35 million in 2000 to 54 million in 2013.

Bill,

Why does it take me 2 sentences of yours for me to realize you did not understand anything I wrote?

What is the age distribution of households, both now and then? If many households began between 2003 and now, the median could be lower even while every individual household is better off.

Good point, and also think about the other side of the age spectrum: retirement. People spend their whole working lives increasing their net worth, which starts decreasing once they retire. As the baby boomers retire, they consume their wealth, leading a decrease in net worth for a large chunk of the middle class that in no way reflects poorer living standards.

I also wonder how pensions are accounted here - someone drawing down an IRA or a 401K has a decline in net worth, but the wealth of someone living off a pension or annuity is constant. The PDF says they use the PSID, which is a "nationally representative survey of U.S. families" reporting on "the total value of all financial and real assets minus any debts". I'm guessing very few respondents accurately report the diminishing NPV of their pensions as they age, or include it in their calculations in the first place.

Wow, apparently the PSID is very careful to calculate the value of pensions: you can see the questionnaires at http://psidonline.isr.umich.edu/Guide/documents.aspx. Each year they have dozens of questions about all sorts of retirement accounts.

Except we are on the cusp of the Boomer retirement. Therefore net worth is at its peak and we are about to start running down hill even faster than the ruling class was able to push up over the last five years.

Except we are on the cusp of the Boomer retirement.

There was a large increase in births registered in 1946 and 1947 when compared with 1945. The mean rate of increase in the size of birth cohorts in the years running from 1947 to 1957 did not exceed the net rate for the period running from 1938 to 1945 and was well below the rate of increase registered during the 1920s. (During the period running from 1928 to 1939, annual birth cohorts were about 2.18 million +/- 5%, with scant net increase). Your 'boom' was in 1946 and 1947, and those people have largely retired.

The Baby Boom was from 45-60, thus meaning the overwhelming bulk of this group have not retired. Sure, the leading edge is now retired, but the mass is still not on social security.

The Baby Boom was from 45-60, thus meaning the overwhelming bulk of this group have not retired. Sure, the leading edge is now retired, but the mass is still not on social security.

There has not been much of a secular trend in the size of birth cohorts since 1947. They fluctuate up and down around a set point of 3.7 million per year or thereabouts. There really was no 'boom', except that spike just after the war. Your problem, really, is that the number entering the age of eligibility for Social Security and Medicare exceeds the number dying by about 1.2 million and will do so for another 15 years or thereabouts. We could have made some antecedent adjustments to stabilize the ratio of retired to the work force (e.g. raising the retirement age on a cohort by cohort basis), but now it's too late to address this problem at this time.

Art Deco,

That's all fine and dandy, but it has little to do with the subject. The poster started this made the claim that household wealth was declining due to Boomers retiring. Not only does the study not show that, the demographics say that cannot be true as the Boomers are just now hitting retirement in force.

As far as your hair splitting over birth rates, here are the figures: http://tinyurl.com/mtjxqph

Clearly, the Baby Boom was that 15 year period of roughly 1945 - 1960. I'm not about to debate with if it started in June of '45 of April of '46. That's entirely pointless.

Z, Its a longitudinal study...that is, the same panel is interviewed in different periods, so the composition effects you are worried about are irrelevant. Its the same folks each period. And, if you look at their data, the folks that are taking the hit are younger families, not even near retirement.

Actually, I don't care about any of this. I was merely pointing out that Baby Boom retirement cannot be an explanation.

As to the study, I suspect that it is mostly bullshit. It has that fevered tone to it that is emblematic of agit-prop. The fact that "inequality" is all the rage in the hive, a liberal group trotting out "science and maths" to "prove" it is predictable.

> "What is the age distribution of households, both now and then?"

...and how many people are in the 'Typical Household' then to now ?

Study adjusts for $inflation, but not other obvious variables.

Facts and accurate statistics/analysis are so annoying to a good story.
But this one easily passed publication muster at the NY Times and here.

Average size of household has changed very little over the study period http://www.statista.com/statistics/183648/average-size-of-households-in-the-us/

But that does not nullify your point. What matters is the distribution. For example, are lower income households choosing to split into smaller households?

For example, are lower income households choosing to split into smaller households?

Might not make sense economically, but it wouldn't surprise me if it were true.

It;s a panel longitudinal study. You are tracking the same population over time. You get interviewed year by year.

Well over that time period a lot of financial idiots made leverage bets on an illiquid asset with high carrying costs and transaction costs. These bets were extremely disproportionate to the rest of their investment portfolio.

It is a shame that evolution does not occur more rapidly.

And recall that at the time, this was lauded as people didn't need to save since their homes would make them wealthy, and not buying was idiotic.

L,

+2

Any who were the cheerleaders for this craziness? Anyone remember the "ownership society"? How is that Open Borders is (almost) always tied to the worst ideas?

You are conflating your two major themes here, Tyler. This data is about the growing inequality in America between the rich & the rest. Average Is Over. The median and mean continue to diverge. "We're not as wealthy as we thought we were" was your stagnation trope meant to explain the Great Recession, which we were out of by 2013. The country is wealthy, but the middle class is disappearing.

William Graham Sumner pointed out that this was a fallacy in 1894. But the redistributionists just keep plugging away.

"Pointed out?" What the heck does THAT mean?

"The country is wealthy, but the middle class is disappearing."

The middle class is growing quite a bit the last couple decades. It's just that they don't live in the USA and they have brown skin.

what we need is more immigration and racial diversity. Ever since the clampdown in immigration that started 30-40 years ago and the severe cutbacks in racial integration that started about the same time, wages have been going down.

Solution--allow at least 100 million immigrants per year from africa, asia and latin america. Problem will be solved in no time!

Are these global figures? I thought we were only supposed to care about lifting all boats.

Obviously the answer to Obama's war on the middle class is to elect Fake Indian in 2016. Nothing speaks to the heart of middle class aspirations like an old rich white woman lecturing us from the steps of her mansion.

Fake Indian 2016!

This is a bit beside the point, but since when did a townhouse become a mansion?

Or is it just a cynical idea that it's easy to convince the rubes that a two million dollar property in Cambridge is a mansion?

Because vagina! Fake Indian! Fake Indian! Fake Indian!

Yeah, because the rubes would really feel for her if they knew the truth of how little two million dollars is in Cambridge, MA.

Z,

"This is a bit beside the point, but since when did a townhouse become a mansion?"

Never happened. She always owned a mansion. See http://bostonherald.com/news_opinion/columnists/2011/07/if_elizabeth_warren_gets_race_don%E2%80%99t_expect_home_run. Value is around $1.8 million according to property tax records. Zilliow is in the $2.4 million range.

Definitely not the sort of place where illegals are going to be a threat to the neighborhood. As servants...

Zephyrus,

Lots of photos online. I think quite a few folks would classify the residence as a mansion. No one would mistake it for a townhouse.

Mansion is a wild overstatement: just as a reminder of what it is, check out http://en.wikipedia.org/wiki/Mansion.

That said, it does appear to be quite a bit more than a townhouse. I'm surprised two million goes that far nowadays in Cambridge. Maybe I should look into moving...

So it looks like whatever we've been doing for a while isn't working well for the average person. Does anybody want to fix that?

And America being poorer than we thought is directly related to the eco-fascists forcing people to use more expensive energy than necessary.

Environmentalism is best understood as a new religious movement. It's warmed over, anti-human nature worship.

Environmentalists hate people. And we hate them.

Net worth calculations tend to miss out some key assets. For example, the present value of Social Security benefits should be included, at least for retirees. Do these figures include any defined benefit pension plans? There are a lot of millionaire teachers and police officers that might have a low net worth by traditional, narrow measures.

How much should we even focus on net worth for middle class Americans? According to Anna Bernasek "When only a few people are winning and more than half the population is losing, surely something is amiss." So if I take my daughters to Disney World next week we're moving closer to the losers, but if we eat Ramen noodles a few times a week and save every penny we're "winning."

This is why the age demographics are so important in these calculations.

Re net worth calculations missing SSecurity: Both periods have SSec, so the change in net worth is unaffected by SSecurity. Re pensions: there are pensions in period 1, and there are pensions in period 2, so when you are looking for changes, the net worth changes for panel participants are constant with respect to pension;;;that is, if you look at net worth changes, you had a right to pension in period 1 and use it in period 2. Moreover, if poor people do not have pensions! Thus, even with your argument, it doesn't apply to poor people or their composition and numbers.

Are the "typical households" in 2003 and 2013 the same size? Part of the decline in net worth might be due to a decline in size.

Also, why do you keep saying "We’re not as wealthy as we *thought* we were"? The study you point to purports to show that we're not as wealthy as we *actually* were.

Fewer children in the household means fewer family members out in the fields picking crops?

"The study" is a press brief of Wealth Disparities Before and After the Great Recession, The ANNALS of the American Academy of Political and Social Science November 2013 650: 98-123 http://ann.sagepub.com/content/650/1/98.full.pdf (gated). An ungated version is here http://www.russellsage.org/research/reports/wealth-disparities-before-after-great-recession

John,

Thank you. This is a very interesting paper.

What does this data say about Piketty data?

Apples and oranges. What would the numbers be if not including immigrants and second generation immigrants? If a lot of poor people move into my neighborhood, the median wealth of my neighborhood declines, but that doesn't imply that my wealth has declined.

Also, changes in household composition, particularly household size, are relevant, as Philo mentioned 20 minutes ago :)

It is a longitudinal study....interview the same panel over time.

From ungated version: "We restrict the sample to households with the same head in 2007 and 2009 to reduce the impact of changes in the composition of households."

Discuss.

It's a longitudinal study.

In case its not clear to you, They interview the same panel over time.

Something's rotten in Denmark. How are we to believe that 95th percentile net worth is lower in 2013 than 2009?

Is there a one paragraph description of 'wealth' here?

I am not going to drill down through the papers but the answer is probably that even at the 95th percentile a family typically has most of its wealth in a house. Declining house prices since 2009 could explain it.

Brian, do you understand what the term 95th percentile means.

Re: Rotten in Denmark and 95th percentile having less in 2013 than 2009.

What's rotten is not the study, but the truth.

Take 100 persons in 2009, Take the wealth of those persons 1 through 95 beginning at the lowest income and working up ; then do the same in 2013. Did wealth go up or down. Then look at the wealth of those 95 to 100 in both periods.

Bill, maybe you should keep to your cryptic haiku fringe comments rather than actually engaging and parading your monumental lack of understanding.

From the study:

"The most pronounced increase in inequality occurred between 2001 and 2007, prior to the Great Recession (Gouskova and Stafford 2009). For example, in 2007, net worth at the 95th percentile was more than double that of 1984, whereas net worth at the 25th percentile declined to 70 percent of its 1984 level. We return to a more detailed discussion of recent trends below."

"Bricker et al. (2012), using the 2007 and 2010 waves of the cross-sectional SCF, find that the largest relative declines in net worth were for people below the 75th percentile of the wealth distribution. Median wealth declined for all income groups except the top decile. Mean wealth declined more for minorities than whites, while the change in median wealth was similar for the two groups."

"By 2011, the stock market had rebounded from its Great Recession low. More affluent households are more likely to hold stocks and have large portfolios, which presumably allowed them to benefit from the gains in the stock market. As a result, net worth not held in real estate actually increased by more than $80,000 at the 95th percentile between 2003 and 2011(from $715,163 to $795,500). The same was not the case at the 75th percentile, the median, or at the bottom of the distribution. That is, even excluding real estate, net worth at the median fell at most points of the distribution except the very top between 2003 and 2011."

It almost appears as if the US economy is now a zero-sum game.

But we are much better off in 2013 than in 2003 because taxes are so much lower with the certainty that almost all the Bush tax cuts would be permanent creating jobs far faster than in the 90s and generating such low unemployment that job opportunity is far greater and wages rising rapidly.

And the rich are far richer and the wealth effect means that far more is consumed so that means everyone is consuming more so they are thus richer.

Think of all that trickle down we got.

I know: In the year 2000 the USA became pregnant with the rest of the world. Then we gave birth. The rest of the world is growing but we are getting old and disfigured.

The US savings rate is not consistent with the US strategy for retirement.

Either people need to save more (and forego short term consumerism) or we need socialism.

If you hate the socialism, you better encourage the savings, disparage the gas guzzlers.

According to the study median wealth is not only below where it was in 2003 but below where it was in 1984. That doesn't fit the "this is due to the housing bubble" narrative. Or the immigration, environmental-fascist, Obama scapegoat narratives. Or even the Average Is Over narrative. More likely these comparisons of wealth between 1984 and 2013 are meaningless.

One reason I think socialism is a good idea for the US is because all the arguments against it seem to rely on very hazy data, whereas the arguments for it seem to err on the side of caution.

Why don't we close the border for brown & black & yellow people, but leave it open for white people? We could be like a big Israel but for whites.

I think everybody would agree things would be far better for all concerned if we had picked our own cotton. When the automated cotton harvesters come online, we'll need even less workers to pick our own cotton.

If we had picked our own cotton, cotton wouldn't have been cheap & there would have been no Industrial Revolution in Manchester, etc..

Also along these lines, if we hadn't increased the scope of the federal government the last 100 years or so, would we have been able to "compete" either economically or militarily with other powers over that time?

This is probably one of our less useful statistics. For instance, when you lose your job and move in with your parents, household wealth increases.

These numbers are terrifying but making them slightly less so... I wonder what would happen if you included some kind of projected NPV of social security benefits as part of this number. As you approach the median household and below those numbers make up a bigger and bigger part of household income support for old age.

Did they include Social Security?

these data to not correlate at all with the FED data

http://www.federalreserve.gov/releases/z1/Current/z1r-5.pdf

attention to page 4 , Table R.100, lines 22 and 23

And looking at house and stock prices, I actually have to suggest that the Stanford paper looks more suspicious

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