Liz Weston: Not feeling the recovery? You’re not alone
Incomes are up, the stock market is soaring, and home prices have largely recovered from the mortgage meltdown. But Americans still haven't regained all the wealth they lost and, on the whole, are worse off than in 1998.
The
—The lowest income families — the bottom fifth — saw their net worth fall 22 percent.
—Hardest hit is the working class, the second-lowest income tier, whose net worth declined 34 percent.
—Families in the middle, with incomes from
—For the top 10 percent, net worth rose 146 percent since 1998. In 2013, the last time the survey was done, net worth for the top 10 percent had risen about 75 percent since 1998.
Net worth is what people own — their houses, cars, retirement and savings accounts — minus what they owe in mortgages, student loans, credit cards and car loans. An analysis of the 2016 data shows that people in the lowest two income bands are getting squeezed from both ends.
AMERICANS OWN LESS AND
Median debt for all families increased by 25 percent since 1998 but rose much more sharply for the lower and working classes. Debt was up 57 percent for those with incomes below
The top 10 percent, those with incomes above
Homeownership dropped in all income categories but most steeply in the bottom three. The homeownership rate fell 11 percent for the lower class, 7 percent for the working class and 5 percent for the middle class. Among the highest-earning families, the decline was less than 2 percent. The value of their homes, though, rose 66 percent, compared with 25 percent overall.
WHY
The decline in wealth actually started long before the recession, says sociologist
Economists can debate precisely why so many people have taken it in the teeth in recent decades, but it's clear that years of stagnant or dropping incomes have taken a toll on their ability to get ahead.
Less income means less money to invest in homes, educations and retirement. Less investment leads to less wealth. Less wealth means being less able to help the next generation get started with educations and down payments. And so the gap widens.
If all boats were rising, tax cuts that benefit mostly the affluent wouldn't be a crisis. Under current circumstances, though, too many people are sinking or barely staying afloat. Lawmakers should focus their concern on those folks, not the ones in the yachts.
This column was provided to The Associated Press by the personal finance website
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