7 ms·

Report finds wealth of top 1% up $21T, bottom 50% down $900B since 1989

mdorazio 7y ago
I'm confused by this. It doesn't quite mesh with the more recent numbers I'm familiar with such as [1], which shows modest gains for the bottom 50% wealth households from 2013 to 2016 [1]. My guess is that the dotcom bust recession and great recession both knocked down bottom-half wealth holders far more than the interim percentage gains to arrive at the net decrease quoted here. [1] https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/ https://dqydj.com/net-worth-brackets-wealth-brackets-one-per...
- y4mi 7y ago
  It's hard to actually understands the current state of our economy and I doubt I do to any significant degree, but from what I gathered from your linked article, they're purely looking at net-worth. This ignores inflation and rising housing costs etc.
  - mdorazio 7y ago
    I guess I'm not understanding the difference between net-worth and wealth in economic terms here then. I assumed they were roughly equivalent.
mquander 7y ago
Don't fall for it: > This follows from 30 years in which the top 1 percent massively grew their net worth while the bottom half saw a slight decline in its net worth. The "top 1%" and "bottom half" are categories, not entities. They are made up of different people in 1989 and 2019, not the same people getting richer and poorer respectively. The author wants you to imagine a bunch of rich people having more and more money each year, and poorer people having less and less. This is not what the statistic means.
- viivaux 7y ago
  > The author wants you to imagine a bunch of rich people getting more and more money, and poorer people getting less and less There is no language in the article to justify this statement. None. And btw, statistics on class mobility are pretty damning in themselves, if you care to look them up.
- ajross 7y ago
  So... what is the lesson you want us to take away? It's true that individuals have varying amounts of success and move in and out of any given bracket all the time, but why is that important to what is clearly a demographic point? On average, if you were poor in the 80's you're poorer now. Some of your poor cohort aren't as poor, and some have lifted themselves out of poverty entirely. Yet more of them are doing worse than they were. That's bad, right? It's a problem you'd like to see fixed, yes? And it certainly is what the statistic means.
  - rland 7y ago
    Not only that. It'd be better to be poor in the 1980s, because since then it has become more difficult to move out of poverty.
- JMTQp8lwXL 7y ago
  > The author wants you to imagine a bunch of rich people having more and more money each year, and poorer people having less and less. That's exactly what it means, though. If you hold an investment for a long time, the returns compound. So your wealth grows exponentially. Conversely, for the poor (debtors, really), compound interest works against you. For example, a college graduate could have an income-based repayment plan and see their student loan balance grow, because of the compounding interest. One of my friends on social media posted about this horror in their financial life this recently. Do some wealthy people lose everything? Sure, lottery ticket winners often do. Do some poor people ascend to the 1%? Yes, many immigrants of modest means come to the USA and found successful companies within the United States (proportionally, when compared to citizens born here). But the takeaway of increasing income inequality is very real. A small silver lining: The U.S. middle class is shrinking, but that's because a good number are moving into the upper middle class, depending on where you draw the lines between "middle class" and "upper middle class". Using inflation-adjusted dollars, more households bring in $100k than just two decades ago.
siculars 7y ago
So, like, everyone gets the same return in the market - say 5% S&P500 avg return - and so the total return on more money is more than the return on less money, because math. 1.05x100<1.05x1000 And, of course, we all know those with capital get better returns on everything and access to all opportunities. Hence the rich get richer. But that's life and math. So?
- ajross 7y ago
  Those numbers don't match the ones in the article. Or the real world. If the bottom half of society was getting the "same return in the market" (for any definition of market) it wouldn't be poorer than it was in 1980.
- viivaux 7y ago
  Is your shtick to act unsurprised at things? There's more going on here than compound interest friendo, this is not the time for acting suave and ignorant.
peisistratos 7y ago
Most work for wages. Workers work a few hours a day creating wealth and keeping the wealth they create. The last few hours a day, they keep absolutely none of the wealth they keep - it is expropriated by heirs. It is a social relationship - we work, they live off our labor. They are parasites, and they have little helpers who they give crumbs to and argue their case, including those who tell guileless fools that a magic man who lives in the clouds named Jesus will make sure they never die.
- dvdhnt 7y ago
  Man, you had me until you went religious. I think - 1) those people have appropriated Christianity since at least King James, as Jesus and his ministry promoted socialism aka selling all of your belonging to fund social programs; 2) we need to stop distracting from the primary topic of wealth inequality / late stage capitalism. Slipping in jabs against capitalism just gives "those" people a leg to stand on and the ability to redirect the conversation. If anything, we should force them to confront the hypocrisy of their political/economic policies when compared to their religion.
hueving 7y ago
And how did the top 49% do? A.k.a all of the middle class and above.
- ajross 7y ago
  The study is of the United States only. I gotta say, I'm seeing a shocking amount of mailed-in right wing defensiveness in this topic, by people who clearly aren't reading the article.
  - JMTQp8lwXL 7y ago
    The arguments for the conservative lens in this discussion seem pretty weak. "But the 1% of decades ago isn't the same cohort as it is today!", etc. These talking points are untethered from reality. In the past, your economic quintile had respectively less correlation to your parent's income (e.g., where you come from). Today, it's quite sticky [0]. There's much less income mobility than there used to be. It's still possible to break out, but it's much less likely to occur. The strongest argument against this might be "it hasn't gotten worse, but it's always been difficult in the US, compared to other industrialized nations". [1] which still leaves one hard pressed to say the economy works for most people. The lion's share of productivity gains go to capital holders, and metrics like life expectancy have plateaued [2]. [0]: https://fivethirtyeight.com/features/rich-kids-stay-rich-poor-kids-stay-poor/ https://fivethirtyeight.com/features/rich-kids-stay-rich-poo... [1]: https://www.npr.org/2014/01/23/265356290/study-upward-mobility-no-tougher-in-u-s-than-two-decades-ago https://www.npr.org/2014/01/23/265356290/study-upward-mobili... [2]: https://www.google.com/search?q=life+expectancy+us https://www.google.com/search?q=life+expectancy+us
    - brownbat 7y ago
      That "cohorts shift" critique didn't land with me either, until I thought of my own path. Grad school pushed me way below the -$6k median for the bottom quintile.[0] I pulled that quintile's average down for years, but I wasn't in trouble or part of some kind of social problem. To be clear -- I don't mean this as a values critique. I definitely want to help those that haven't had the opportunities to succeed like I have, and support charities and programs that I think will have the most impact. But I still have a methodological quibble. If we want to address poverty, it's important to understand it. For that, we need to separate out the people moving through quintiles due to life stages, and isolate those that are really stuck. I'm not sure the best way to do that. It'd be nice to see this data separated out by age, I guess, that might be one way. [0] https://www.thebalance.com/american-net-worth-by-state-metropolitan-4135839 https://www.thebalance.com/american-net-worth-by-state-metro...
daenz 7y ago
>People's Policy Project >The primary mission of 3P is to publish ideas and analysis that assist in the development of an economic system that serves the many, not the few. Some article titles: >Tackling Inequality Through the Social Ownership of Capital >Capitalism is hostile to families. The welfare state can fix that. >The Difficulty of Using the Firm in Socialist Policy With this as context, it's pretty easy to see that the thread's post is clearly anti-capitalist, socialist propaganda, with a heavy political agenda to make people mad at "the rich" and support overthrowing "the system."
- ballenarosada 7y ago
  Would you like to engage with the ideas in the piece?
  - daenz 7y ago
    It's essentially "rich people are richer than me, and that makes me mad." There is no novel idea here to engage with. People have been jealous of wealth since the beginning of time. But now we cloak that jealously with faux moral outrage and elaborate economic "solutions."
    - ajross 7y ago
      Can't it be "poor people are getting poorer because rich people are taking wealth away from them on balance, and that makes us mad". I mean... that's bad right? It should make us mad. We're a wealthier society on average than we were in the 80's, we all should be wealthier, yet we aren't. I genuinely don't understand the denialism on this. You don't have to be a raving socialist to recognize that an outcome is unfair. Can't you be a free market republican and want to see the poor do better along with the rest of us?
    - orwin 7y ago
      Workers are poorer. That's the issue. Wage slave is not just a fancy association of world, it is now the state of a lot of people.
- 7y ago
RickJWagner 7y ago
Maybe so. But the poor of today (at least in the US, which the article is about: - Have smart phones (entertainment) - Have climate controlled housing - Have better food than the poor of 1989 - Have fewer diseases and live longer than their 1989 counterparts - etc. It's not fun being poor, but there's never been a better time. In a similar way, the rich don't live that much better than the next lowest classes. A middle class home feels more like a McMansion than the rich/poor housing comparison of 1989.

I'm confused by this. It doesn't quite mesh with the more recent numbers I'm familiar with such as [1], which shows modest gains for the bottom 50% wealth households from 2013 to 2016 [1]. My guess is that the dotcom bust recession and great recession both knocked down bottom-half wealth holders far more than the interim percentage gains to arrive at the net decrease quoted here. [1] https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/ https://dqydj.com/net-worth-brackets-wealth-brackets-one-per...

y4mi 7y ago
It's hard to actually understands the current state of our economy and I doubt I do to any significant degree, but from what I gathered from your linked article, they're purely looking at net-worth. This ignores inflation and rising housing costs etc.
- mdorazio 7y ago
  I guess I'm not understanding the difference between net-worth and wealth in economic terms here then. I assumed they were roughly equivalent.

mquander 7y ago

Don't fall for it: > This follows from 30 years in which the top 1 percent massively grew their net worth while the bottom half saw a slight decline in its net worth. The "top 1%" and "bottom half" are categories, not entities. They are made up of different people in 1989 and 2019, not the same people getting richer and poorer respectively. The author wants you to imagine a bunch of rich people having more and more money each year, and poorer people having less and less. This is not what the statistic means.

viivaux 7y ago
> The author wants you to imagine a bunch of rich people getting more and more money, and poorer people getting less and less There is no language in the article to justify this statement. None. And btw, statistics on class mobility are pretty damning in themselves, if you care to look them up.
ajross 7y ago
So... what is the lesson you want us to take away? It's true that individuals have varying amounts of success and move in and out of any given bracket all the time, but why is that important to what is clearly a demographic point? On average, if you were poor in the 80's you're poorer now. Some of your poor cohort aren't as poor, and some have lifted themselves out of poverty entirely. Yet more of them are doing worse than they were. That's bad, right? It's a problem you'd like to see fixed, yes? And it certainly is what the statistic means.
- rland 7y ago
  Not only that. It'd be better to be poor in the 1980s, because since then it has become more difficult to move out of poverty.
JMTQp8lwXL 7y ago
> The author wants you to imagine a bunch of rich people having more and more money each year, and poorer people having less and less. That's exactly what it means, though. If you hold an investment for a long time, the returns compound. So your wealth grows exponentially. Conversely, for the poor (debtors, really), compound interest works against you. For example, a college graduate could have an income-based repayment plan and see their student loan balance grow, because of the compounding interest. One of my friends on social media posted about this horror in their financial life this recently. Do some wealthy people lose everything? Sure, lottery ticket winners often do. Do some poor people ascend to the 1%? Yes, many immigrants of modest means come to the USA and found successful companies within the United States (proportionally, when compared to citizens born here). But the takeaway of increasing income inequality is very real. A small silver lining: The U.S. middle class is shrinking, but that's because a good number are moving into the upper middle class, depending on where you draw the lines between "middle class" and "upper middle class". Using inflation-adjusted dollars, more households bring in $100k than just two decades ago.

siculars 7y ago

So, like, everyone gets the same return in the market - say 5% S&P500 avg return - and so the total return on more money is more than the return on less money, because math. 1.05x100<1.05x1000 And, of course, we all know those with capital get better returns on everything and access to all opportunities. Hence the rich get richer. But that's life and math. So?

ajross 7y ago
Those numbers don't match the ones in the article. Or the real world. If the bottom half of society was getting the "same return in the market" (for any definition of market) it wouldn't be poorer than it was in 1980.
viivaux 7y ago
Is your shtick to act unsurprised at things? There's more going on here than compound interest friendo, this is not the time for acting suave and ignorant.

peisistratos 7y ago

Most work for wages. Workers work a few hours a day creating wealth and keeping the wealth they create. The last few hours a day, they keep absolutely none of the wealth they keep - it is expropriated by heirs. It is a social relationship - we work, they live off our labor. They are parasites, and they have little helpers who they give crumbs to and argue their case, including those who tell guileless fools that a magic man who lives in the clouds named Jesus will make sure they never die.

dvdhnt 7y ago
Man, you had me until you went religious. I think - 1) those people have appropriated Christianity since at least King James, as Jesus and his ministry promoted socialism aka selling all of your belonging to fund social programs; 2) we need to stop distracting from the primary topic of wealth inequality / late stage capitalism. Slipping in jabs against capitalism just gives "those" people a leg to stand on and the ability to redirect the conversation. If anything, we should force them to confront the hypocrisy of their political/economic policies when compared to their religion.

hueving 7y ago

And how did the top 49% do? A.k.a all of the middle class and above.

ajross 7y ago
The study is of the United States only. I gotta say, I'm seeing a shocking amount of mailed-in right wing defensiveness in this topic, by people who clearly aren't reading the article.
- JMTQp8lwXL 7y ago
  The arguments for the conservative lens in this discussion seem pretty weak. "But the 1% of decades ago isn't the same cohort as it is today!", etc. These talking points are untethered from reality. In the past, your economic quintile had respectively less correlation to your parent's income (e.g., where you come from). Today, it's quite sticky [0]. There's much less income mobility than there used to be. It's still possible to break out, but it's much less likely to occur. The strongest argument against this might be "it hasn't gotten worse, but it's always been difficult in the US, compared to other industrialized nations". [1] which still leaves one hard pressed to say the economy works for most people. The lion's share of productivity gains go to capital holders, and metrics like life expectancy have plateaued [2]. [0]: https://fivethirtyeight.com/features/rich-kids-stay-rich-poor-kids-stay-poor/ https://fivethirtyeight.com/features/rich-kids-stay-rich-poo... [1]: https://www.npr.org/2014/01/23/265356290/study-upward-mobility-no-tougher-in-u-s-than-two-decades-ago https://www.npr.org/2014/01/23/265356290/study-upward-mobili... [2]: https://www.google.com/search?q=life+expectancy+us https://www.google.com/search?q=life+expectancy+us
  - brownbat 7y ago
    That "cohorts shift" critique didn't land with me either, until I thought of my own path. Grad school pushed me way below the -$6k median for the bottom quintile.[0] I pulled that quintile's average down for years, but I wasn't in trouble or part of some kind of social problem. To be clear -- I don't mean this as a values critique. I definitely want to help those that haven't had the opportunities to succeed like I have, and support charities and programs that I think will have the most impact. But I still have a methodological quibble. If we want to address poverty, it's important to understand it. For that, we need to separate out the people moving through quintiles due to life stages, and isolate those that are really stuck. I'm not sure the best way to do that. It'd be nice to see this data separated out by age, I guess, that might be one way. [0] https://www.thebalance.com/american-net-worth-by-state-metropolitan-4135839 https://www.thebalance.com/american-net-worth-by-state-metro...

daenz 7y ago

>People's Policy Project >The primary mission of 3P is to publish ideas and analysis that assist in the development of an economic system that serves the many, not the few. Some article titles: >Tackling Inequality Through the Social Ownership of Capital >Capitalism is hostile to families. The welfare state can fix that. >The Difficulty of Using the Firm in Socialist Policy With this as context, it's pretty easy to see that the thread's post is clearly anti-capitalist, socialist propaganda, with a heavy political agenda to make people mad at "the rich" and support overthrowing "the system."

ballenarosada 7y ago
Would you like to engage with the ideas in the piece?
- daenz 7y ago
  It's essentially "rich people are richer than me, and that makes me mad." There is no novel idea here to engage with. People have been jealous of wealth since the beginning of time. But now we cloak that jealously with faux moral outrage and elaborate economic "solutions."
  - ajross 7y ago
    Can't it be "poor people are getting poorer because rich people are taking wealth away from them on balance, and that makes us mad". I mean... that's bad right? It should make us mad. We're a wealthier society on average than we were in the 80's, we all should be wealthier, yet we aren't. I genuinely don't understand the denialism on this. You don't have to be a raving socialist to recognize that an outcome is unfair. Can't you be a free market republican and want to see the poor do better along with the rest of us?
  - orwin 7y ago
    Workers are poorer. That's the issue. Wage slave is not just a fancy association of world, it is now the state of a lot of people.
7y ago

RickJWagner 7y ago

Maybe so. But the poor of today (at least in the US, which the article is about: - Have smart phones (entertainment) - Have climate controlled housing - Have better food than the poor of 1989 - Have fewer diseases and live longer than their 1989 counterparts - etc. It's not fun being poor, but there's never been a better time. In a similar way, the rich don't live that much better than the next lowest classes. A middle class home feels more like a McMansion than the rich/poor housing comparison of 1989.