The middle class is even further from the upper crust than any other time on record, according to a new analysis from the Pew Research Center. Citing data from the Federal Reserve’s Survey of Consumer Finances, Pew says the median net worth of upper-income households (those with twice the median income or more) is 6.6 times that of people in the middle class (those with two-thirds to twice the median income).
Study: The wealth gap between the middle- and upper-classes is the largest on record
Source: Pew Research Center
That’s the biggest gap on record, though data only goes back to 1983 so it may have been higher in the more distant past. Back then, the median wealth of people at the top was only 3.4 times that of the middle-income family.
This is a snapshot of families’ total net worth, not just what they take in in a year. Wealth inequality is much starker than income inequality in the US — the top 1 percent of Americans holds just over one-third of the wealth, while the top 1 percent of earners takes in around one-fifth of the income.
It’s true that the median wealth of the upper-income Americans has wavered since 2001, but it also has risen by around $50,000, to $640,000, while the median wealth of middle-income families has fallen off by nearly $40,000, to just under $100,000.
Source: Pew Research Center
What is perhaps most striking about this widening gap between the middle- and upper-class is that even while we read these numbers and understand in theory that this gap is widening, it’s hard for people in the lower income tiers to conceptualize just how great the inequality is.
In a 2010 study, Harvard’s Michael Norton and Duke’s Daniel Ariely famously asked Americans to list off how big they think wealth inequality is in the US and how big it should be. In both cases, respondents were way off.
That doesn’t mean Americans aren’t very bright; rather, it highlights one of the problems of inequality — it’s so hard to understand the scope of it from our own individual perspectives. So even when we hear that the lives of the richest Americans are further and further divorced from those of the rest of the nation, it’s hard to really understand just how big that shift is, even with all the charts and numbers in the world.
See More:
