Not supremely confident despite the stock market being at all-time highs? Unsure of the future and feeling poorer than in the past? You are not alone. In fact, you are among the 93% majority. As the Pew Research Center finds, during the first two years of the US economic ‘recovery’, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%. As they explain, affluent households typically have their assets concentrated in stocks and other financial holdings, while less affluent households typically have their wealth more heavily concentrated in the value of their home. Due to these differences, wealth inequality increased during the first two years of the recovery. The upper 7% of households saw their aggregate share of the nation’s overall household wealth pie rise to 63% in 2011, up from 56% in 2009, with the mean wealth of affluent households now 24x the less affluent group (up from 18x in 2009). So the next time you see some talking-head on TV devoutly proclaiming his faith in the Fed’s QE policies, perhaps it’s worth considering in which cohort he and his clients sit.
Source: Pew Research Center