Increases In Wealth?
March 13, 1996
The wealth of American households rose 17 percent between 1989 and 1992, with those further down the economic ladder owning an increasing portion and the share of the top 1 percent declining by 8 percent, according to a survey by the Federal Reserve and the Internal Revenue Service.
- The portion of the nation's wealth owned by the wealthiest one percent of American households declined to 30.4 percent in 1992 from 37.1 percent in 1989.
- The next richest nine percent saw their share increase from 31.2 percent to 36.8 percent over the period.
- The bottom 90 percent of Americans saw their share of the wealth rise from 31.8 to 32.8 percent over the three-year period, a statistically insignificant increase.
- However the aggregate wealth of the bottom 90 percent grew by 20 percent from 1979 to 1992.
Thus the proportion of wealth held by the different income groups reverted to about what it was in 1983, when the top 1 percent of households held 31.5 percent, the next 9 percent held 35.1 percent and the bottom 90 percent held 33.4 percent.
Particularly striking was the rise in ownership of stocks and bonds among the lower 90 percent.
- Their share of stocks grew from 14.6 percent to 18.9 percent in the three-year period.
- Their share of bond holdings more than doubled, from 5.9 percent to 12 percent.
The survey defines wealth as household net worth (the total of a household's assets, including real estate, stocks, bonds, insurance policies, self-owned businesses and savings accounts) minus its liabilities -- all debts including mortgages and credit cards.
Conducted every three years, the "Survey of Consumer Finances" is the most comprehensive of its kind. The survey contradicts claims of increasing economic inequality, and some economists have already suggested that the results are unreliable this time around.
Source: Richard W. Stevenson, "Rich Are Getting Richer, but Not the Very Rich," New York Times, March 13, 1996.
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