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Monday, 28 July 2014 08:37

Average US Household Now Worth a Third Less, While Assets of the 1% Soar

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MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

tax1(Photo: darya-mead)

It would be an understatement to assert that The New York Times (NYT) was never sympathetic to the Occupy Movement. NYT reporting on Occupy and income inequality has generally served as a mini-me transcript of former Mayor Michael ("I'm with the titans of Wall Street") Bloomberg.

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Yes, The New York Times does post Paul Krugman and occasional op-eds on income inequality, but usually, its coverage of economic issues leans heavily toward the financial interests of the top percentage earners - the people who buy the luxury goods and services advertised in the paper. When it comes to the economy, the NYT is not the paper of record; it is the paper promoting the interests and lifestyles of the rich.

That was why I was surprised to see buried in the July 26 edition, in a section called Business Day, an article with this headline: "The Typical Household, Now Worth a Third Less." Now, that is a blunt headline, merited by the opening two paragraphs of the story:

Economic inequality in the United States has been receiving a lot of attention. But it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.

When it comes to economic inequality, it doesn't get any more telling than a study that proves that the "typical" US household has decreased in net worth by a third since 2003. As BuzzFlash has noted, many analysts speculate that 95 percent of the economic rebound from the 2008 crash of the economy has ended up in the hands or offshore accounts of the top 1 percent of US households. 

Although The New York Times article is brief, considering the significance of the Russell Sage Foundation findings, it confirms that the gains made by even the top 5 percent were significant:

The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 95 percent of the population had less wealth.) It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years. Other research, by economists like Edward Wolff at New York University, has shown even greater gains in wealth for the richest 1 percent of households.

This information reinforces the notion that there may be a financial "shock doctrine" at work in which the wealthiest came out of the 2008 debacle even wealthier. Meanwhile, the vast majority of US households came "out" of the financial collapse with a third less net worth.

This report that confirms the devastating impact of income inequality on the majority of US households deserves far more attention than it is receiving. Once again, a study indicates that money is not trickling down from the rich; it's trickling - gushing might be the better word - up to them and away from us.

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