Wealth inequality in US not seen since Great Depression - study

[senheiser]

Wealth inequality in US not seen since Great Depression - study
Published time: November 10, 2014 15:57
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Reuters/Lucas Jackson

A new study has revealed that 0.01 percent of the population holds more and more of America’s wealth. The share of wealth in the hands of middle class families has tumbled to levels not seen since before the Wall Street Crash in 1929.

A research paper from the London School of Economics shows previous estimates have seriously underestimated the amount of wealth controlled by the very rich in the US. Authors Saez and Gabriel Zuchman, have used a greater variety of sources, including the effect of things like property tax and tax avoidance strategies.

The researchers used the bottom 90 percent of families as a measure of middle class wealth. They found that in the late 1920’s, just before the Wall Street Crash, the bottom 90 percent controlled 16 percent of America’s wealth.

This share rose steadily from the beginning of the great depression until the end of the Second World War, due to a collapse in wealth of the richest households, and continued to rise after World War Two as the middle class wealth grew on a par with national wealth.

The middle class also saw rising rates of home ownership during this period and by the early 1980s the share of wealth owned by the middle class was reckoned at 36 percent, roughly four times what the top 0.1 percent controlled.

But since the early 1980’s the net worth of the US middle class has collapsed, due to a sluggish growth in middle class incomes but mainly because of soaring debt, including mortgages.

Meanwhile the fortunes of the very rich have grown. 16,000 families make up 0.01 percent of households in America, and are worth an average $371 million. They control 11.2 percent of total US wealth, which is a similar share to that seen back in 1916.

But even coming slightly down the spectrum, the top 0.1 percent, consisting of 160,000 families, hasn’t done nearly as well and holds 22 percent of US wealth – a bit less than their 1929 peak. This is the same share as the bottom 90 percent.

The authors also sound the alarm over how these huge fortunes were amassed. Although some young families have grown rich through entrepreneurial activity, such as billionaires like Mark Zuckerberg, many are rich through fortunes they have inherited.

 

[VCheng]

We all know there is no real wealth in USA. It all belongs to China, right?

 

[jamahir]

the photo in the article shows such irony and tragedy...

 

[Aepsilons]

the photo in the article shows such irony and tragedy...

Sadly true. But more or less that man is a homeless individual and most likely has a host of mental issues. The homeless are placed in the street due to a legislative decision stemming back in the 1970s that effectively ended federally administered mental health facilities, and placed care and advocacy of individuals in these said institutions in the hands of local communities.

Unfortunately these local communities do no t have the resources and thus led to the creation of the urban homeless situation in the United States. There are only so much homeless shelters can do when these patients / clients are suffering from a cluster of mental health pathologies.

And given the lack of access to mental health, as well as communication issues, its hard for them to be directed to care.

To learn more, do refer:

The Causes of Homelessness in America

National Coalition for the Homeless

http://www.nami.org/Content/Navigat...get_Cuts_Report/NAMIStateBudgetCrisis2011.pdf

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[asquare]

All these studies suffer from the same problem (including Thomas Piketty's book which has gotten so much attention)- they measure nominal inequality not real inequality. Inequality needs to be measured in consumption baskets, so to claim that inequality is rising, it needs to be proven that the consumption baskets of the rich are diverging from the consumption baskets of the poor.

In reality, the opposite is happening- the increase in wealth inequality is mostly due to the increase in real estate value (Piketty shows this). What this means is that one of the items in the consumption basket of the rich (their homes) is actually a lot more expensive. This squeezes the consumption patterns of the rich and poor closer together. There are plenty of careful studies talking about this, unfortunately more serious work doesn't get quoted in the media.

 

[jamahir]

Sadly true. But more or less that man is a homeless individual and most likely has a host of mental issues.

All these studies suffer from the same problem (including Thomas Piketty's book which has gotten so much attention)- they measure nominal inequality not real inequality.

the simple reasons are two... (a). money system that decides quality of life, (b). homes are not a right, provided free by the government.

there is no need for those two things to exist... libya until 2011 did not have homeless people... housing was a basic right... imagine the cost and resources for usa military to wage invasion of libya... that money and resources could have been employed in removing homeless from usa and providing free medical service to everyone.

instead, the old man lives on the steps and this lady kills herself ( Woman working 4 jobs to make ends meet dies while napping in car between shifts — RT USA )...