A Pew Research Center study indicates that wealth inequality widened dramatically during the first two years of economic recovery following the Great Recession, as the upper 7 percent of U.S. households saw average net worth rise 28 percent while the wealth of the other 93 percent declined.
From 2009 to 2011, the average net worth of the nation’s 8 million most-affluent households climbed to $3.2 million from an estimated $2.7 million, Pew reports.
For the 111 million households that make up the lower 93 percent, average net worth fell 4 percent to $134,000 from $140,000 over the same period. The changes mean the wealth gap separating the top 7 percent and everyone else increased from 18-to-1 to 24-to-1 between 2009 and 2011.
The biggest difference between the two groups, according to Pew, is that the wealthiest households have their assets concentrated in stocks and other financial instruments while others’ wealth is concentrated in their homes. Both stock and property values were pummeled during the recession. But in the recovery, stock values have rebounded nicely and reached new highs. Residential values — particularly for those living in nonexclusive areas — have stayed mostly flat, although there have been some stirrings of a recovery in the past year.
In the two-year period covered by the report, the Standard & Poor’s 500-stock index rose by 34 percent; but the S&P/Case-Shiller home price index slipped by 5 percent.
Source: “As Economy Recovers, The Richest Get Richer, Study Shows,” Washington Post