I learned today that the average net worth of a household in the bottom 50% set a record last quarter of $67,000. That's good to hear.
Except for one thing: Total net worth for all households has gone up 7x since 1990. So a record doesn't mean much unless that record is at least 7x the level in 1990.
It isn't. All that's happening right now is that net worth at the bottom is slowly making up for its long slide since 1990 followed by its disastrous plummet during the Great Recession. But even after 30 years, it still hasn't:
The share of total net worth owned by the bottom half of households has gone down 16% since 1990. Likewise, the share owned by the middle 49% has gone down 11%.
And the top 1%? I don't even have to tell you, do I? Its share has gone up 36%.
The post-Reagan era has been pretty disastrous for the working poor, the working class, and the middle class, and it's been OK for the upper middle class. But it's been truly spectacular for the rich.
And yet many folks in the working and middle classes still tell pollsters they trust Republicans more than Democrats to run the economy. Why? It is a mystery.
"Middle 49%". Why.
I have to wonder if the “Middle” there means the 49% between the Bottom 50 and the Top 1.
It does. I didn't understand the point of it.
I'm confused by your confusion. You don't understand the point at looking at this information, or you don't understand the point of the bucketing?
If it is the latter, that's easy. The buckets are "the poors", "the middle class through the very well off", and "the rich". It is a fuzzy set of distinctions commonly, if fuzzily, made by most humans.
If you're asking the former, I have to ask why you're even here.
It isn't "fuzzy"; it's arbitrary. It's not done by anyone else. I'll wait while you go search for evidence to show otherwise. The most common division of measurement is along quintiles with a breakout of the top 1, 2, or 5%.
But that's why you come to to read Kdrum.
If you wanted the same old quintiles, well, you can get that anywhere.
More seriously, people constantly break things in to those three buckets. Kevin is just putting numbers to them.
The middle class is not the same as the "middle 49%". No one tracks the "middle 49%". Again, I'll wait right here for you to show evidence.
No competent person defines poor as the bottom 50% or middle class as 50%-99%.
Y’all are welcome to draw your own graphs if you don’t like how Kevin has categorized the data. But that would require more labor than just opening a webpage and bitching about stuff.
It does.
It does?
That doesn't sound plausible.
49% between the Bottom 50 and the Top 1.
This number mentioned in the comment by Rick Jones you replied to would equal nearly half of US households (48%)—indeed the upper half—save the top 1.25 million or so households. In other words something like 123 million households, all in the upper half of the net worth distribution, including lots of quite affluent people (IOW folks at the 93rd, 94th, 95th, 96th etc percentiles—all the way up to the 99th).
I guess it wouldn't shock me to learn that the top 1% of households are worth more than the top (almost) 48%. But fully three times as much (11 vs 36)? Seems implausible. Again, there would be many millions of quite wealthy folks in that larger group, including millions of millionaire households, lots of fairly high-ranked executives, lawyers, doctors, etc with large, very expensive homes in rich suburbs, and so on. Being at the 98th or 99th percentile in American is pretty wealthy!
(I realize the top 1% includes all billionaires, but there are only about 800 such households, and their total net worth is probably "only" 4-5 trillion, which might work out to, say, 3-4% of the aggregate household net worth of the US.)
Anyway, these numbers and exactly what they mean are a mystery to me.
Ahh...just spotted my error...was reading the 11 and 36 as wealth shares. It's been a long day!
"but there are only about 800 such households, and their total net worth is probably "only" 4-5 trillion" Your math isn't going to work given that Musk and Bezos have a combined net worth of 500 billion. According to https://en.wikipedia.org/wiki/List_of_wealthiest_Americans_by_net_worth
The 26th to 27th most rich have a net worth between 2.7 trillion and 10 trillion (skewing towards the lower number. So the top 52 gets you over 5 trillion.
Petty bourgeois mindset. Cleansing that your the blue and white collar peasant requires debt liquidation to "educate" when your starving to death.
It's "I am poor or middle class because I don't have ambition or work ethic" if I did, I would be rich. It's globalist brainwashing and the enemy of populism.
Kevin, cleanup in isle 5. Your pet troll is leaking, I'm not even sure it know which post it is vomiting on.
Call the amber lamps.
The great majority of white Americans are happy with this as long as they can be assured that the lives of African Americans will not improve.
Oh yeah, sure. Sounds legit.
Brett Favre liked this.
One example of self-damaging communication and how Republicans successfully trump Democrats.
Privileged White Guys are all too happy to compromise away the rights and respect for everyone else to get what they want.
Average is meaningless- do the median. The bottom half of America has almost now wealth.
The bottom half, by definition, has as its upper cutoff point - the median. The 50th percentile is the median.
And when run back to 1970 to include the pre-Reagan era rather than 1990? Even then, the Bottom 50% didn’t seem to get anything back in the Clinton era and only very little in the Obama.
Republican control of congress for most of both eras.
Bbbut… we always look to the president as being either this enlightened all-powerful despot when doing/asked to do what we want, or just a plain despot when it is what we don’t want …
I have a theory on this, but it would require comparison to European first world countries.
The theory is that:
1. Up to about the 1980s, those in the middle class and below, in the US, had an advantage that no other first world country had, which was the ability to own land that was rapidly appreciating due to US first world status.
2. That situation is over, permanently.
3. The below middle class here in the US does not want to believe in "classes" and at the moment a huge percentage of Dem voters think its due to racism (which it is, sort of, but its an analytical mistake to assume its all racism), and a huge percentage of Rep voters think its due to not being capatalistic enough (sheesh, what a mistake that is).
4. Without becoming at least as socialist as Europe, there is no reason for this trend not to continue.
YMMV.
With respect to framing, speaking from other side of the Atlantic there would seem to be broad foundation (although calling Europe 'socialist' is silly adoption of Republicans bizarre framing).
Democrats appear to rather overly frame their policies in design and in communication at The Poor and The Minorities - which can be well founded but is shit salesmanship. Such positioning may well be in large part the avoidance of Class thinking in USA (per (3)) which then diverts the political channel to either ethnic minority identarian politics or poverty politics.
Such bad salesmanship on the part of the Democrats (and perhaps also also bad policy in terms of the idea of having broad enough reach to get and sustain real buy-in) certainly gives the Republicans a sales point to cover up the bad impact of their own policy.
Technology revolutions are always devastating for the lower classes. Average height of europeans dropped 2 inches during the industrial revolution due to rampant starvation. This is covered up by the fact that the average person becomes much better off. This is achieved by killing (or stopping succesful procreation of the bottom third) and making the middle third the bottom half.
If you put this post together with the post about the shortage of home health care workers, you cansee how the're two sides of the same problem; not paying typical workers enough. The US doesn't need socialism it needs effective unions
My experience, which is an anecdote, is that I rarely see economists point out that the upper classes, for purposes of this post being defined as those who have a direct impact on what they make, may not have an incentive for the working classes to make less, but since the starting point is how much the owner class needs to make, and the workers end up with what's left.
This means it doesn't matter how much you increase working class wages, inflation (spurred on by what the upper classes can afford to spend) eats it up.
Europe addresses this by:
1. Government health care.
2. College is not part of a crazy capitalist spiral.
3. Public transportation is always provided.
4. Much higher quality public housing is provided.
That's how the working classes in other countries end up with better quality of life. Plus, this list or things like it are the only things the government can control.
And even that is cracking, see les gilets jaunes and the like.
... but since the starting point is how much the owner class needs to make ...
I have a theory similar to what you have posited here and in your post above, only my hypothesis is that it was the collapse of the Breton Woods system that did for the middle class. So what if growth had slowed to the point where the average person's income was no longer increasing at the rate of five percent per year? The rich are bound and detemined that _their_ God-given right to a 5 - 15 percent annual dividend on their wealth not be disrupted and the Devil take the poors. The 70's both terrified and outraged them, and everything since has been a reaction to the economic events of that decade.
Everything.
Historically, over 1-2 generations the working class gets richer by wiping out the existing working class and turning the bottom half of the former middle class into the working class.
Maybe they're comparing it more to their immediate peers, where the discrepancy isn't as wide?
Wow I have even less money (relatively) than I thought.
There is no mystery. As I keep saying, lower-income whites did not switch their voting from Democrat to Republican in the Goldwater-Nixon-Reagan era because they were reading Ludwig von Mises and Bill Buckley on the merits of laissez-faire capitalism, they did it because Republicans signaled that they would support white supremacy. Southern Democrats like Strom Thurmond and George Wallace were explicit in supporting "segregation" although that is itself a euphemism. But since Republicans had been the party of equal rights, their leaders did not (and do not) admit to racism, getting their message across with dog-whistles. The media largely went along with the idea that racism was not a major factor after the Civil Rights era.
Although the message has been getting more explicit again, it's still not socially acceptable outside of sympathetic groups to admit to racism, so people have to give excuses for why they vote Republicans. Did anybody really vote for Trump because of Hillary's emails? Since "socialism" is one of the things that Republican propaganda talks about and Republican politicians call themselves "libertarians", many people in polls and in diner interviews will say they favor Republicans for economic reasons.
The MSM, which are actually pro-corporate economically, also promote big-business views on a lot of issues, and oppose leftist candidates.
Eh, many never switched. They were Republicans after the civil war and they joined the Wilson then FDR worker coalition but we're still register Republican . Look at appy white voter from 1865--2015.
The South always had bourbon in their blood. Once the racial alliance was dead, it fractured. Run a true populist like Bryan or Sam Watson, many of those states are in play(Missouri,Texas,Arkansas,Tennessee). Bourbon neoliberalism
Is globalism. The
Your problem is telling a story. Look at what actually happened.
At some level people seem to have accepted that capitalism = corruption, so Donald Trump is viewed as someone who understands how to beat the system. As I recall this was the explicit message he delivered in 2016: "I understand how to cheat, now I'm graciously saying I'll cheat for you". Meanwhile the Democrats are left being the boring party of studying hard and working hard. It's a mystery to me too. I mean, look at California. Is the message of California "liberals have impoverished everybody"? as the right wingers would have you believe? Or is the message of California "if you run a good university system then people get educated and everyone benefits from the high salaries"? Number 2 is obviously correct, but is also way more sophisticated and difficult to understand. Nevertheless, if I were in charge, the message the Democrats would be delivering would be, "would you deny your kids education and health care just to save money? That's the Republican way. Want your children to have a good life? Gotta support education and health care". Gotta admit, as always, the enlightened self-interest message is a much harder sell (because it's more complex) than the lizard brain message ("muscle good, fighting good, golden toilet good"). Still, I'd be running ads comparing life in California to the conservative paradise of Mississippi.
Your point is irrelevant. Capitalism will die no matter what. Markets will liquidate and that is it.
Trump supporters hate public education. Traditionalist republicans, i.e. never trumpers, have for decades opposed exposing their children to basic science, i.e. evolution.
Rich people own the media. It is not hard to understand.
Rich people are now predominately democrats.
Republicans give people someone to blame and make promises about job growth they don't intend on keeping.
Democrats give policy solutions that bore everyone, even if those are the things that work and really help people.
Democrats believe in governance and the ability of governments at all levels to help people. Republicans just have to throw a spanner into the works to screw things up--then blame the Democrats for things not working.
The net result is people get riled up about, well, nothing--then vote accordingly. Trying to explain to them that they are voting against there own self interest just gets them to dig in further. In the mean time, rust belt cities are still rusting and rural areas are becoming more rural by the day--dominated by the few wealthy people in the area.
Once again I am missing something in understanding a KDrum graph. So bottom 50% share of US Total Net Worth declined from roughly 4% in 1990 to roughly 3% in 2022 - and this is described as a decline of 16%? What am I missing?
I came here to say this, and was surprised to only find one comment asking about it. I keep staring at it, but the start/end points clearly do not equate to their written description.
The Top 1% goes from about 24% to about 32%, yet this is described as 36%?
Or not so clearly. What are we missing?
(32-24)/24 = 33%
Ah, of course: 36% of itself!
All the percentages, describing different things, confused me a bit. Ha.
Thanks for clarifying!
(4-3)/4 = 25%, so it's likely to be from 4 to say 3.4 which is about 16%
“ And yet many folks in the working and middle classes still tell pollsters they trust Republicans more than Democrats to run the economy. Why? It is a mystery.”
Short version of just one reason:
Republicans’ answer to every problem requires no near-term sacrifice. Dems are not as good at lying, but they try.
Democrats need to emphasize that historically, the economy does much better under democrat presidents.. It wasn't just covid hat had Trump have the worst economic record since Herbert Hoover. It was basic republican economic theory that caused GWBush to start the worst economic catastrophe since the great depression. It was not a coincidence that the best economic record in the last 50 years was held by Bill Clinton. It wasn't coincidence that Carter hired Paul Volker to run the fed and ended 2 decades of out of control inflation. It's not a coincidence that the Fed run exclusively by Trump appointees continued quantitative easing til mid Mar of 2022 when it was obvious it should have been terminated in July 2021. And yes, Trump did spend his entire 4 years in office constantly trying to brow beat the fed into printing more money.
The middle 50% of Americans are extremely wealthy by global standards. Frankly, the middle 50% of Americans are very wealthy when compared to Western Europeans. I don't worry to much about how many jets Jeff Bezos can afford or if Bill Gates buys a super yacht.
How wealthy are Americans? It isn't just money. Wealth is about the ability to command goods and services.
Without knowing how age distribution has changed over the same period these numbers are meaningless. Adults in their 30s, after buying their house, are suppose to have a negative net worth. Senior citizens need a substantial positive net worth. Senior citizens have doubled as a per cent of the population (senior citizens grow at a #5 rate pre covid and 2% post covid, non senior adults at 0.5% pre covid and <0.1% post covid) in the last 22 years and are now the richest age group due to our extremely successful social security and medicare policies.
Most people when they buy a house have positive net worth. Even if they owe the entire cost of their house, in most places, housing appreciates in value, so the people in those houses have untapped home equity. In most circumstances, the value of the home offsets the value of the mortgage. The homeowner can always sell the house to pay the mortgage off.
If most people really had negative net worth after buying a home, there would be a lot more personal bankruptcies filed. Credit card, auto loan, school loan and medical debt are the top reasons for negative net worth, not having a mortgage… primarily because you can’t sell off the stuff purchased for a high enough price (or at any price) to pay back the debt incurred.