Median Family Wealth Is at a 43-Year Low, Study Finds

×
American family
The idea that poor and middle-class Americans are suffering is nothing new: Anyone with access to the news (or, for that matter, to an ordinary suburban neighborhood) is likely to notice that it has gotten harder for average families to make ends meet. Beyond that, a veritable army of economists, politicians and pundits has spent the past few years pointing out the growing gap between the rich and everyone else.

Now, a recent study by New York University economics professor Edward N. Wolff has put the decline of the American middle class in a whole new perspective: According to Wolff's calculations, the median net worth of American households has now reached a 43-year low of $57,000 (in 2010 dollars).

On the surface, the fact that American households are poorer and less stable than they were in 1969 is shocking. And the deeper one digs, the more it becomes clear that the situation is even worse than those headline numbers suggest.

The median, after all, is the midpoint, which means that there are an equal number of households above and below that line. And we don't have to go far below that line to find troubling data.

According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (in constant 1995 dollars) rose from 29.7 percent to 37.1 percent. And yes, that "less than $10,000" figure includes the many households with no assets at all, or "negative assets" -- what we in the non-academic world just call debt.

Where did all the money go? Over the same period, the richest 1 percent of households increased their average wealth by 71 percent.

Here's another way to gauge the shift in wealth: From 1983 to 2010 the share of total wealth held by the richest 10% of American households increased from 68.2 percent to 76.7 percent. All the rest of Americans lost ground.

Most studies of wealth inequality focus on salaries -- a rich arena for discussion when one considers that the average CEO takes home 380 times as much money as his or her average worker. By contrast, Wolff's focus on total wealth not only measures how much money a household brings in, but also the amount it accumulates. This latter number is highly significant -- economically secure households are generally more comfortable spending their disposable income, and are less likely to become a drag on the social safety net. With that in mind, Wolff's calculations don't just paint a worrisome picture of the present; they also suggest a dimmer economic future.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.






Correction: A previous version of this article did not specify that the statistic regarding the changes in the percentage of households with less than $10,000 in assets was figured using constant 1995 dollars, rather than constant 2010 dollars. We regret the error.

Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

Add a Comment

*0 / 3000 Character Maximum

327 Comments

Filter by:
niceguyarl

Naturally, this article implies that all the fault lies with evil capitalists. (Notice there is never any mention of the grossly disproportionate salaries of professional athletes and movie stars. It's always the evil CEOs...) Does Wolff even consider the possibility that a big part of the blame lies with bloated government and out-of-control entitlements that have buried tax payers in debt and robbed citizens of the incentive to work?

December 01 2012 at 11:21 AM Report abuse -1 rate up rate down Reply
maa2626

sorry

November 29 2012 at 9:48 PM Report abuse rate up rate down Reply
maa2626

?

November 29 2012 at 9:48 PM Report abuse rate up rate down Reply
maa2626

smilin bruce another s--t article for the regime. how do you sleep at night

November 29 2012 at 9:48 PM Report abuse +1 rate up rate down Reply
icantgetnosatisfaction

So Fields / Somey, What's to stop Obama and his thugs from pissing away all the extra money he would be getting , a whole whopping 600 billion, for taxing the hell out of the top 2 % . He's already going to beat the hell out of all America with the Obama Care Hell taxes ?

November 29 2012 at 1:24 PM Report abuse +1 rate up rate down Reply
1 reply to icantgetnosatisfaction's comment
icantgetnosatisfaction

Where did you go Evan ? You don't want to defend your loser Messiah Obama ?

November 29 2012 at 7:02 PM Report abuse +1 rate up rate down Reply
icantgetnosatisfaction

The reason the economy boomed under Clinton is because the republicans controlled the nation's finances. I love Faaahhhhccccccttttttttssssssshhhhhhhhssssss don't you Somey ?

November 29 2012 at 1:01 PM Report abuse +1 rate up rate down Reply
1 reply to icantgetnosatisfaction's comment
icantgetnosatisfaction

GOP VOOOOO-DOOOOOO, under Clinton .....Amazing !

November 29 2012 at 1:07 PM Report abuse +1 rate up rate down Reply
1 reply to icantgetnosatisfaction's comment
icantgetnosatisfaction

Laissez-faire.......OOOOOOOOOO LA LA

November 29 2012 at 1:11 PM Report abuse +1 rate up rate down
icantgetnosatisfaction

What's your median income up to Somey with all your welfare and food stamps ?

November 29 2012 at 11:22 AM Report abuse +1 rate up rate down Reply
icantgetnosatisfaction

Obama's agenda is to destroy the wealthy and prop up the poor by making them reliant on the government for every little thing. The only problem with that is, after the wealth is gone, where's he going to get the money from to keep propping up the poor ? Come on Somey, you're the brain of the DNC, tell us .

November 29 2012 at 10:37 AM Report abuse rate up rate down Reply
1 reply to icantgetnosatisfaction's comment
sfields435

Increasing income taxes on the wealthy by 4.6% and capital gains taxes slightly will not wipe out this nation's wealth -- in fact, at that rate, our economy boomed under Clinton, we added nearly 24 million jobs and the wealthy prospered as the middle class grew. The top tax rate in this nation was actually increased to over 90% -- by Eisenhower --- to pay off our WWII debt, invest in technology and education for our returning GI's (which gave us the ability to out pace the world). Obama isn't interested in dependancy -- he's interested in educating America out of poverty. He probably needs to start with low-information Conservatives.

November 29 2012 at 12:54 PM Report abuse -1 rate up rate down Reply
2 replies to sfields435's comment
icantgetnosatisfaction

No ammo Somey ?

November 29 2012 at 12:58 PM Report abuse +1 rate up rate down
icantgetnosatisfaction

I guess you are out of high priced gas, like your Messiah Obama.

November 29 2012 at 1:08 PM Report abuse rate up rate down
icantgetnosatisfaction

This hope and change is pushing us forward into the poor house.

November 29 2012 at 9:51 AM Report abuse -1 rate up rate down Reply
2 replies to icantgetnosatisfaction's comment
Somey

Such feeble come-backs, which means, that you don’t have much ammunition to support your position

November 29 2012 at 9:56 AM Report abuse -1 rate up rate down Reply
3 replies to Somey's comment
Somey

"48 million Americans collecting food stamps. What did I forget ?" this is cause by the GOP's voodoo economics

November 29 2012 at 10:06 AM Report abuse -2 rate up rate down Reply
4 replies to Somey's comment
icantgetnosatisfaction

scumlician : See OWS

November 29 2012 at 9:48 AM Report abuse -1 rate up rate down Reply