Wealth inequality in the United States

CBO Chart, U.S. Holdings of Family Wealth 1989 to 2013. The top 10% of families held 76% of the wealth in 2013, while the bottom 50% of families held 1%. Inequality increased from 1989 to 2013.[1]

The inequality of wealth (i.e. inequality in the distribution of assets) has substantially increased in the United States in recent decades.[2] Wealth commonly includes the values of any homes, automobiles, personal valuables, businesses, savings, and investments, as well as any associated debts.[3][4]

Although different from income inequality, the two are related. Wealth is usually not used for daily expenditures or factored into household budgets, but combined with income, it represents a family's total opportunity to secure stature and a meaningful standard of living, or to pass their class status down to their children.[5] Moreover, wealth provides for both short- and long-term financial security, bestows social prestige, contributes to political power, and can be leveraged to obtain more wealth.[6] Hence, wealth provides mobility and agency—the ability to act. The accumulation of wealth enables a variety of freedoms, and removes limits on life that one might otherwise face.

Federal Reserve data indicates that as of Q4 2021, the top 1% of households in the United States held 32.3% of the country's wealth, while the bottom 50% held 2.6%.[7] From 1989 to 2019, wealth became increasingly concentrated in the top 1% and top 10% due in large part to corporate stock ownership concentration in those segments of the population; the bottom 50% own little if any corporate stock.[8] From an international perspective, the difference in the US median and mean wealth per adult is over 600%.[9] A 2011 study found that US citizens across the political spectrum dramatically underestimate the current level of wealth inequality in the US, and would prefer a far more egalitarian distribution of wealth.[10]

During the COVID-19 pandemic, the wealth held by billionaires in the U.S. increased by 70%,[11] with 2020 marking the steepest increase in billionaires' share of wealth on record.[12]

  1. ^ "Trends in Family Wealth, 1989 to 2013". Congressional Budget Office. August 18, 2016. Retrieved November 29, 2016.
  2. ^ Smith, Matthew; Zidar, Owen; Zwick, Eric (2022). "Top Wealth in America: New Estimates under Heterogeneous Returns". The Quarterly Journal of Economics. 138: 515–573. doi:10.1093/qje/qjac033. ISSN 0033-5533.
  3. ^ Hurst, Charles E. (2007), Social Inequality: Forms, Causes, and Consequences, Pearson Education, Inc., p. 31, ISBN 978-0-205-69829-5
  4. ^ Rugaber, Christopher S.; Boak, Josh (January 27, 2014). "Wealth gap: A guide to what it is, why it matters". AP News. Retrieved January 27, 2014.
  5. ^ Grusky, David B. Social Stratification: Class, Race, and Gender in Sociological Perspective, p. 637. Westview Press, 2001 ISBN 0-8133-6654-2
  6. ^ Keister, p. 64
  7. ^ "The Fed - Table: Distribution of Household Wealth in the U.S. since 1989". www.federalreserve.gov. Retrieved May 6, 2022.
  8. ^ Cite error: The named reference Vox_DFA was invoked but never defined (see the help page).
  9. ^ Anthony Shorrocks; Jim Davies; Rodrigo Lluberas (October 2018). "Global Wealth Report". Credit Suisse. October 10, 2018, article: Global Wealth Report 2018: US and China in the lead. Report[permanent dead link]. Databook[permanent dead link]. Downloadable data sheets. See Table 3.1 (page 114) of databook for mean and median wealth by country. See page 106 (end of Table 2.4) for total wealth of continents.
  10. ^ Norton, M.I.; Ariely, D. (2011). "Building a Better America – One Wealth Quintile at a Time" (PDF). Perspectives on Psychological Science. 6 (1): 9–12. doi:10.1177/1745691610393524. PMID 26162108. S2CID 2013655. (video)
  11. ^ Cite error: The named reference picchi was invoked but never defined (see the help page).
  12. ^ Cite error: The named reference wir2022 was invoked but never defined (see the help page).