The Few, the Proud, the Very Rich
By Sylvia Allegretto
UC Berkeley Center on Wage and Employment Dynamics
Much of the current political and popular discourse has focused on inequalities that exist in the U.S. In particular, the Occupy movement has brought the huge disparities in wealth to the forefront. There are a few questions floating round about wealth. First, how skewed is the distribution? Second, it is true that the rich have gotten much richer over time? (a statement I often heard my Grandma make).
Well, there is a plethora of statistics (e.g. here, here, & here) out there, but here are two. The share of wealth held by the top fifth is about 87.2 percent, while the bottom four-fifths share the remaining 12.8 percent of wealth—so the Occupiers are correct in their assessment. And, the riches of those in the top 1 percent are about 225 times greater than that held by the typical family—it was 125 times in 1962—so, Grandma was correct too.
But, let’s look a bit further. The triennial Survey of Consumer Finances (SCF) is one of the best sources for data on wealth in the U.S. And, of course the Forbes 400 estimates the worth of the wealthiest amongst us—all 400 wouldn’t be captured in the SCF. If we look at both the SCF and the Forbes 400 we can glean some interesting insights.
In 2007 (the most recent SCF) the cumulative wealth of the Forbes 400 was $1.54 trillion or roughly the same amount of wealth held by the entire bottom fifty percent of American families. This is a stunning statistic to be sure.
Upon closer inspection of the Forbes list reveals that six Waltons—all children (one daughter in-law) of Sam or James “Bud” Walton, the founders of Wal-Mart—were on the list. The combined worth of the Walton six was $69.7 billion in 2007—which equated to the total wealth of the entire bottom thirty percent!
BTW, the new 2011 Forbes 400 has the inherited worth of these six Waltons at $93 billion. The 2010 SCF data that is slated for release spring of 2012 will almost certainly show a further widening of the wealth gap given that corporate profits, stocks and CEO pay have all recovered while housing values & equity (the lion’s share of wealth for average Americans), wages and family incomes have yet to turn around.
These revelations renewed my interest in the inheritance and estate tax debates. Also, didn’t I just read somewhere that Wal-Mart is substantially rolling back health care coverage for part-time workers and significantly raising premiums for many full-time staff?
We’ve got to get serious about reversing the long term trend of the ever increasing concentration of income and wealth into the hands of a few at the expense of the many. At stake is nothing less than our economy and our democracy.
Sylvia A. Allegretto PhD is a labor economist at the UC Berkeley Center on Wage and Employment Dynamics. She received her Ph.D. in Economics from the University of Colorado, Boulder and worked for several years at the Economic Policy Institute in Washington, DC. This article originally appeared on the Labor’s Edge.