Friday, November 30, 2012
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 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% to 37.1%. 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.” Fully 85% of self-described middle-class adults say that it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. “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.