Class warfare: How much money is middle class? (Part 2-wealth)

If your household earns $50,221, you are smack in the middle of U.S. households by income. That might make you middle class in income, but class is based not just on how much people earn, but also on how much they have.

Net wealth is the total of all assets (e.g., house, cars, bank accounts, stocks, pension funds) minus the total of all liabilities (e.g., mortgages, car loans, credit card debt). The net wealth of U.S. households declined precipitously during the recession. According to Pew Research, “Adjusted for inflation, the median wealth, or net worth, of U.S. households fell from $96,894 in 2005 to $70,000 in 2009, a drop of 28%.”

That wealth distribution is not even. The 400 richest Americans, according to Forbes, had a net worth of $1.37 trillion in 2010.  The net worth of the poorest 60 percent of U.S. households was $1.26 trillion in 2010. The remaining $52.27 trillion was spread among the other 39 percent, and skewed toward the upper end.

Lest we feel too envious of the 400 richest Americans, Forbes notes that

America’s super rich are getting poorer. For only the fifth time since 1982, the collective net worth of The Forbes 400, our annual tally of the nation’s richest people, has declined, falling $300 billion in the past 12 months from $1.57 trillion to $1.27 trillion.

The gap between rich and poor is large: the gap between white households, black households and Hispanic households is even larger.

In 2009, the median wealth of white households was 20 times as high as the wealth of black households and 18 times as much as the wealth of Hispanic households. These ratios are about twice as high as the ratios that existed before the onset of the housing crisis, the stock market crash and the Great Recession. … The wealth gaps that currently exist between whites, Hispanics and blacks are the highest in at least 25 years. (Pew Research)

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