Some Thoughts On US Wealth Patterns

How is the distribution of wealth evolving? Here, the underlying data come from the Distributional Financial Accounts calculated by researchers at the Federal Reserve, which is only available since 1989--the tail end of the period when the wealth/GDP ratio was fairly stable. The top figure shows the share of wealth going to the top 1%; the second figure shows the share of wealth from the 90th-99th percentile; the third figure shows the share of wealth for the 50th-90th percentile, and the bottom figure shows the share of wealth for the bottom 50%. 

(Click on image to enlarge)

What patterns emerge here? 

Even as the wealth-to-GDP ratio has been rising, not all groups of the wealth distribution have benefited in the same way. Lest I be accused of burying the lede here, the big story with US wealth is the growth in wealth/GDP ratio and the growing share of that wealth held by the top 1%. The share of wealth going to the top 1% shows occasional setbacks, like when the stock market fell in 2001 or in the aftermath of the Great Recession, but overall, the share of wealth going to this group has risen from about 24% of the total back in 1990 to above 30% of the total more recently. One thinks here of some of fortunes that have been made by Microsoft, Google, Facebook, Apple, along with Berkshire Hathaway--all benefiting from the overall run-up in the stock market prices of these companies.

The pattern for to the 90th-99th percentile looks rather different. It was a little over 37% of the total in 1990 and is a little over 38% of the total now. What seems to be happening here is that the wealth of this group benefitted less from the 1990s run-up of the stock market than did the top 1%--so the share of total wealth for this group declined during that time. However, the wealth of this group also suffered less from the stock market decline of 2001, and from the aftereffects of the Great Recession. So after three decades of down and up and down, it's overall share hasn't changed by much. 

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