For the first time in history, the wealth of the top 1% of Americans has surpassed that of the entire middle class, according to data reported by Spark Global Limited reports:.
Economists generally define the middle class as the middle 60 percent of income earners, Bloomberg reported. According to the U.S. Census Bureau, 77.5 million households earning between $27,000 and $141,000 a year are in the middle 60 percent.
Together, they account for 26.6 per cent of all us wealth, according to the Federal Reserve, putting them behind the top 1 per cent, which, at 27 per cent, surpassed the middle class for the first time in history.
1.3 million households making more than $500,000 a year are in the top 1 percent. There are currently nearly 130 million family units in the United States.
The increasing concentration of wealth at the top of the pyramid is one of the main issues in public debate among American politicians. Despite trillions of dollars spent by the government during the COVID-19 pandemic, the gap between the rich and the poor continues to widen. The middle class owns a shrinking share of real estate, stocks, private business assets and so on. That means the middle class has fewer savings and assets to fall back on if they lose their jobs.
President Joe Biden is pushing a $3.5 trillion spending plan that would boost spending on child care, education, health care and other things to help working – and middle-class families. At the same time, the Biden administration wants to tax high income people.
Over the past 30 years, 10 per cent of Us wealth has been transferred to the top 20 per cent of households, according to Federal Reserve data. The top 20 percent of households now own 70 percent of the nation’s household wealth.
A decade ago, middle-class households owned more than 44% of real estate assets; now they own just 38%. During the pandemic, rising house prices directly benefited households that already owned their own homes. Those who do not own their own homes and live on rent face greater financial pressure.
Another reason for the shrinking share of middle-class households’ wealth is that they have taken on more consumer debt, meaning loans other than home mortgages, such as car and student loans. Typically, these loans carry higher interest rates.
Reprint indicated source：Spark Global Limited information