The wealthy are getting wealthier. As for everyone else, no such luck.
A report released Wednesday by the Pew Research Center found that the wealth gap between the country’s top 20 percent of earners and the rest of America had stretched to its widest point in at least three decades.
Last year, the median net worth of upper-income families reached $639,400, nearly seven times as much as those in the middle and nearly 70 times the level of those at the bottom of the income ladder.
There has been growing attention to the issue of income inequality, particularly the plight of those earning the federal minimum wage of $7.25 an hour or close to it.
But while income and wealth are related (the more you make, the more you can save and invest), the wealth gap zeroes in on a different aspect of financial well-being: how much money and other assets you have accumulated over time, including the value of your home and car plus any investments in stocks, bonds and the like.
Think of it as “a measure of the family ‘nest egg,’” as Pew calls it — a hoard that can sustain a household during an emergency, like the loss of a job, and in the long run can see someone through retirement.
The wealth gap “exposes varying degrees of vulnerability,” said Valerie Wilson, an economist at the Economic Policy Institute, a left-of-center research group in Washington, adding that it also was passed down through the generations.
While those at the top have managed to recoup much of the wealth lost during the economic downturn, middle-income families have not made any gains.
“The Great Recession destroyed a significant amount of middle-income and lower-income families’ wealth, and the economic ‘recovery’ has yet to be felt for them,” the report concluded.
Pew, which used data from the Federal Reserve, defined middle income as $44,000 a year for a family of four, while a yearly income of $132,000 for the same-size family pushed a household into the upper ranks. About one in five families qualifies for that higher status, while 46 percent occupy the middle range.
The median household net worth last year for those in the middle was $96,500, only slightly above the $94,300 mark it hit in 1983 (after being adjusted for inflation). A poor household actually had a higher median net worth 30 years ago ($11,400 in 1983) than it counted last year ($9,300).