The booming U.S. economy has benefited the middle class but widened the gap between the haves and have-nots, according to two recent reports.
A private study released Jan. 18 showed the earning gap between the richest and poorest Americans widened in the 1990s. Income for the richest 20 percent of Americans rose 15 percent in 10 years since the late 1980s. Earnings at the bottom fifth of wage earners, meanwhile, grew less than 1 percent, according to the study by the Economic Policy Institute and the Center on Budget and Policy Priorities.
The following day the U.S. Federal Reserve released a separate study showing changes not only in income but also in net worth, the difference between a person’s total assets and total liabilities. The federal study found Americans’ net worth grew strongly between 1995 and 1998, with mean net worth rising 25.7 percent and the median 17.6 percent. The strongest gains came for those with incomes of $100,000 or more, a group likely to have made large gains in the stock market. Groups with the lowest incomes, however, lost ground despite America’s economic boom.
The median net worth dropped 25 percent for those earning less than $10,000, while the mean declined 14 percent. At the other end of the spectrum, those earning $100,000 or more, the mean net worth rose 22 percent. (ABP)