American Households Hit 43-Year Low In Net Worth
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NO, NO, TAKE MY MONEY … OVER HERE, PLEASE TAKE MINE! |
WASHINGTON (CBS DC) – The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.
According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.
According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7 percent to 37.1 percent. The “less than $10,000″ figure includes the numerous households that have no assets at all, or “negative assets,” which is otherwise known as “debt.”
Over that same period of time, the wealthiest 1 percent of American households increased their average wealth by 71 percent. [THE STUDY DIDN'T ASK THE 1% HOW THEY BELIEVE THEIR WEALTH INCREASED?]
As noted by Daily Finance, from 1983 to 2010 the share of total wealth held by the richest 10 percent of American households increased from 68.2 percent to 76.7 percent. Meanwhile, all the rest of Americans lost financial ground.
An August Pew Research Center study found that many in the middle-class are divided on how they believe his gap widened.
Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62 percent say “a lot” of the blame lies with Congress, while 54 percent say the same about banks and financial institutions, 47 percent about large corporations, 44 percent about the Bush administration, 39 percent about foreign competition and 34 percent about the Obama administration.
Just 8 percent put “a lot” of blame on the middle class itself. [WOW, … and how did this "group" vote in the last election? So, let's review … the last four years was so good "they" decided to continue with the folly!]
“This downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers,” the Pew Report stated. “But the middle-income tier—defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median —is the only one that also shrunk in size, a trend that has continued over the past four decades.”
Wolff’s focus on total wealth not only measures how much money a household brings in, but also the amount it accumulates. This latter number is very significant — economically secure households are generally more comfortable spending their disposable income, and are less likely to become a drag on the social safety net.
There are seven specific issues addressed in the paper.
- Did the inequality of household wealth rise over time, particularly during the years from 2007 to 2010?
- Did median household wealth continue to advance over time or did it fall, particularly from 2007 to 2010?
- Did the debt of the middle class increase over time, especially during the last three years of the previous decade?
- What are the time trends in home ownership and home equity and what happened, in particular, from 2007 to 2010?
- Did the rate of stock ownership and the value of retirement accounts rise over time, especially at the end of the last decade?
- How did time trends in average wealth, household debt, the home ownership rate, home equity, stock ownership, and the value of retirement accounts vary by age group?
- What are the time trends in average wealth, household debt, the home ownership rate, home equity, stock ownership, and the value of retirement accounts for different racial and ethnic groups?
So here's the link to the scholarly endeavor: http://appam.confex.com/appam/2012/webprogram/Paper2134.html
Seven of 10 Richest Members of Congress Are Democrats
For the second year in a row, Republican Rep. Michael McCaul of Texas is the richest member of Congress, with a reported net worth of $305 million — the first time a Washington lawmaker has surpassed the $300 million mark.
Roll Call’s annual list of the 50 richest members of Congress reveals that seven of the top 10 are Democrats — and four of the 10 owe their fortunes to wealthy spouses.
McCaul, a former federal prosecutor, reported in 2010 that his wife had received assets as gifts from her parents, boosting his net worth from some $73 million to at least $294 million that year. His wife Linda is the daughter of Clear Channel Communications Inc. CEO and founder Lowry Mays.
Roll Call determines the minimum net worth of members by subtracting the total minimum value of all liabilities from the total minimum value of all assets. Lawmakers do not have to report the value of personal residences as an asset.
The assets and liabilities are listed in broad ranges, making it difficult to calculate a lawmaker’s exact minimum net worth, Roll Call pointed out.
Second on the 2012 list of richest members of Congress is Sen. John Kerry, D-Mass., up from No. 3 last year with a net worth of $199 million. His wife Teresa Heinz Kerry is the widow of the late Sen. H. John Heinz III of the Heinz ketchup fortune.
At No. 3, down one place this year, is Rep. Darrell Issa, R-Calif., at $141 million. Issa is the founder of Directed Electronics Inc., which makes car alarms.
Next on the list is Sen. Mark Warner, D-Va., at $86 million. He made his fortune as co-founder of Nextel Communications Inc.
Sen. Jay Rockefeller, D-W.V., is No. 5, with $83 million. He is the great-grandson of Standard Oil Co. founder John D. Rockefeller.
He is followed by Sen. Richard Blumenthal, D-Conn., at $79 million. His wife Cynthia Blumenthal is the daughter of New York real estate mogul Peter Malkin.
Another Democrat, Rep. Jared Polis of Colorado, is No. 7 with a net worth of $72 million. Much of his wealth comes from Blue Mountain Arts, his family’s greeting card and publishing business.
Sen. Frank Lautenberg of New Jersey, yet another Democrat, is No. 8 at $57 million. He is co-founder of Automatic Data Processing, a payroll processing company.
Sen. Dianne Feinstein, D-Calif., No. 9 on the list, owes her fortune to her husband Richard Blum, president and CEO of the private equity firm Blum Capital Partners LP. Her net worth is estimated at $42 million.
Rep. Jim Renacci, R-Ohio, is No. 10 with a net worth of $37 million. He has significant investments in fast-food chains, electronics companies, pharmaceutical companies, and oil giants, according to Roll Call.
House Minority Leader Nancy Pelosi of California is at No. 13, with a net worth of $26 million, and Senate Minority Leader Mitch McConnell of Kentucky is at No. 37 with $9 million.
The “poorest” member on the list is Sen. Ben Nelson, D-Neb., with a net worth of $6.28 million.
