Friday, October 7, 2011

What's up with the 1% - Trends in net worth

Last night on TRMS we were treated to this graph of percentage income increases over the years. It made me think, is annual income what this is really about? I had been given to understand that the problem is wealth disparity, rather than income disparity. Maybe, though, I've been misled, so let's look at the numbers.

On the theory that wealth disparity might actually be a major component of the collective angst, I dug into this report to find out how net worth (defined on page 6) has trended since 1983:

(click to enlarge)

The results shown above (taken from table 2 on page 44) were really quite surprising, at least to me. It turns out that the top 1% aren't going gangbusters after all, at least not if the Levy Economics Institute is to be trusted on such matters. Moreover, to the extent that the top earners are getting even wealthier, it is primarily on account of the top 5%, rather than the top 1% which have been trending flat for two and a half decades. So, five-percenters, consider yourself warned. Once the rabble eat the super-rich, you're next.

Tomorrow: Income trends

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