America’s Richest Now Hold More Than One-Third Of The World’s Wealth
Whether or not you feel it and regardless of whether you like it or not, America is richer than ever. Several economic factors have been working hand in hand to make America’s economy richer than ever. However, barely any American feels this as it is only the top 1% of the population who has been benefiting from this pattern.
America’s Richest are Richer than Ever
America’s top 1% now hold 38.6% of the nation’s wealth. This marks a historic high as the richest are now richer than ever. This news came about when such was revealed by a new report by the Federal Reserve.
The report showed that Americans throughout the income and wealth ladder had gains between 2013 and 2016. While there had been significant gains across all income brackets, it was the wealthiest that had the most and this was largely driven by gains in the stock market and asset values.
Highest Rise in Wealth Ever
This top 1% saw their share of wealth rise from around 36.4% in 2013 to around 38.6%. The next highest nine percent of wealthy families had a slight drop while the share of wealth held by the bottom ninety percent had been steadily falling for 25 years and reached their all-time low in 2016 at 22.8%.
The top earners had the biggest gains in average as the top 1% had their share of income rise to a record-breaking 23.8% from just 20.3% in 2013. The share of the bottom 90% of the income fell to 49.7% in 2016.
Why This Happened
One of the biggest factors which might have contributed to this growth in wealth was the rapid rise in the value of several shares in the stock market. This was coupled with a steady recovery in the prices of real estate in the last several years. Working together, these had pushed total household income in the USA to around $95 trillion, which is around $30 trillion more than the last recession began in 2007.
A percentage of disposable income, household net worth just hit a new peak. This means that the wealth in the United States in relation to the size of the population is now the highest on record.
Why You Might Not Feel it
Numbers and analysts from everywhere confirm that America is richer than ever before. However, you might ask yourself why you are not by any means feel this increase in wealth. While wealth is increasing, as a matter of fact, around 60% of Americans feel that the nation is headed towards the wrong path. Around 10 million working-age men who are supposed to be in the labor force are sitting at home instead.
So, what could the problem be? How can a nation as powerful as America get so rich but so divided? This begins with the concentration of all that wealth which sits with a smaller portion of the population than it has for decades. Consumers also are not that confident in the economy unlike how they used to as scars from the housing bust and financial meltdown from years ago still reveal themselves.
The Bottom Line
What this means for the rest of us is not really anything new. The rich are getting richer while the middle and lower class are generally missing out of the gains in wealth. The widespread frustration and a backsliding middle class has been said to make Donald Trump win the presidency last year. Now, the same pattern which holds the economy which Trump has vowed to change is happening again.
There are more jobs than ever and wages are rising faster than before. However, consumers still remain reluctant to spend and this could be what causes growth to stagnate at around 2% per year.
While America is getting richer by the minute, it looks like it is only the richest portion of the population who has been benefiting from this. This has been linked to the spending habits of most rich people, who do not spend anything based on market performance. Rich people are less likely to spend their extra money than lower-income people who are working on a budget. What do you think of this rise in wealth? Do you feel or see it in any way? Share your thoughts with us in the comments below.
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