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Wealth Distribution and the Top 1%

The Economic Policy Institute recently published the 2011 State of Working America’s Wealth [1] and the data is fascinating.

It’s also very timely, since many of us have seen our portfolios recover completely from the lows a few years ago, but we’re wondering how we stack up.

Some of the highlights are obvious, including the impact of the housing debacle devastating millions of people’s net worth. What’s interesting is how the housing market impacted different classes:

Wealthy households, for example, tend to hold a much higher percentage of their wealth in stocks and bonds, whereas less-affluent households typically hold most of their wealth in housing equity—which is why the recent troubles in housing have disproportionally affected the middle class.

The Top 1%

The paper has a lot of very powerful graphs that illustrate the widening gap between the top 1% and everyone else. Here are the statistics about the top 1% that I find most intriguing:

  • The wealthiest 1% of U.S. households had net worth that was 225 times greater than the median or typical household’s net worth in 2009. This is the highest ratio on record.
  • The 1% of households with the highest incomes received 21.3% of all income in the economy.
  • The top 1% of wealth-owning households owned 35.6% of all net worth and 42.4% of all net financial assets.
  • The bottom 90% of income-earning households received 52.9% of all income, but owned just 25.0% of all net worth and 17.3% of net financial assets.

Average Wealth

And of course, for everyone wondering how you stack up, here is the average wealth of the top 20% in 2009:

  • Top 1%: $14 million
  • Next 4%: $2.7 million
  • Next 5%: $908K
  • Next 10%: $478K

Here is a complete breakdown of the average wealth by each of the 20% increments in 2009:

  • Top 20%: $1.7 million
  • Next 20%: $208K
  • Third 20%: $65K
  • Fourth 20%: $5.5K
  • Lowest 20%: -27K

What do you think of the data?


By the Numbers


And More!