Wealth gap biggest in history
The difference between the “haves” and the “have nots” is larger than it’s ever been.
That’s according to a Pew Research Center report, which finds the median wealth of upper-income families is almost seven times that of middle-income ones, and nearly 70 times more than low-income families. Pew defines wealth as the difference between the value of a family's assets and its debts.
Pew looked at 2013 data from the Federal Reserve, which shows the top bracket coming in at $639,400. That compares to $96,500 for the middle and just $9,300 for the low end. Pew says that’s the biggest divide between both upper and middle and upper and lower since the Fed began recording such data a generation ago.
Yahoo Senior Columnist Michael Santoli says the stock market boom is a big reason for the increasing separation.
“It’s mostly because the very upper level of the income and wealth spectrum owns a lot of financial assets,” he points out. “And financial assets have done so much better than both incomes and home values over the last several years that the gap has just naturally spread.”
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Another finding in the report: gains in wealth for middle- and low-income families have remained pretty much static since 1983, while it has tripled for upper-income ones. Santoli says all this separation of wealth is not healthy for our economy.
“I don’t think anybody wants it to get so extreme that you have this sense that nobody who starts outside the top can achieve something," he notes. "And median incomes have not kept up with the cost of living. Basically, inflation-adjusted incomes have been stagnant for years. That’s the big problem.”
Santoli feels growth in what folks take home in their paychecks is needed to change the equation.
“It’s not so much the scorekeeping of who has more now versus the top,” he argues. “It’s really about whether you can get ahead by just working.”
Santoli thinks as long as the stock market continues to soar, the gap between the “haves” and the “have nots” will stay wide. But there are indications things could be changing.
“It doesn’t mean it has to be this way forever,” he says. “We’re seeing signs that both median incomes are starting to nudge higher as the job market starts to tighten up and in theory, home values should follow.”
