July 15, 2019
As I wrote earlier this month, American wealth is up.
But as my previous post hints, the increase tends to be concentrated on the wealthiest Americans who own stocks. So then, it’s no surprise the wealth gap is widening, even among the richest people.
The rich are getting richer. Per Federal Reserve Data, the wealth distribution in America has become even more disproportionate since 2000.
In fact, in 2018, the richest 10 percent of households represented 70 percent of all U.S. wealth. In 1989, it was 60 percent.
Also, the share of wealth of the richest 1 percent of Americans grew to 30 percent last year. That means 1 percent of people own a third of all the wealth (it was 23 percent in 1989).
It’s pretty scary that so few people own so much.
The change in wealth among the top 10 percent of Americans was primarily due to that group acquiring more stocks, both of publicly traded companies and private businesses. Still, asset share gains were largest for the top 1 percent of Americans.
It’s not a surprise. The financial crises and resulting fallout brought upon a decline in home and stock values for the bottom 50 percent of Americans.
They were scared off and have yet to reenter the market. Their losses were locked in and they’re hesitant to invest again.
The bottom line is, while stocks and home prices have hit new highs, ownership of both has shrunk for most people. As a result, we have a wider wealth gap than at any time since the 1930s, right around the time of The Great Depression.
It seems storm clouds are forming on the horizon.