The Briefing
- Today, the top 1% of U.S. households own 31.2% of total wealth
- Data going back over 200 years suggests that wealth inequality in both the U.S. and Europe reached its peak in the early 1900s
What The Data Says About Wealth Inequality
Wealth inequality has gone through peaks and troughs throughout history.
Most recently, in the decade between 2010 and 2020, the top 1% of U.S. households’ portion of wealth has gone from 28.6% to 31.2%.
However, when expressed in raw dollars, things begin to look different. Wealth during the same period for the 1% went from approximately $17.5 trillion to $35 trillion. Meanwhile, the total wealth pool rose from $60 trillion to $112 trillion.
In other words, all households by category have amassed wealth during the same period, albeit at different rates.
| Household Wealth Percentile | Annual Growth in Wealth (CAGR) |
|---|---|
| Top 1% | 6.54% |
| 90-99% | 5.75% |
| 50-90% | 4.97% |
| Bottom 50% | 3.30% |
Source: The Federal Reserve
Drivers Of Wealth Inequality
The longest bull market in history, which went from March 2009 to February 2020, has been a big driver for the recent divergence. The U.S. composition of wealth for the top 1% of households skews towards corporate equities and mutual funds, of which they collectively own $14 trillion. By contrast, the bottom 50% of households own $0.16 trillion.
It’s often said a stock market correction is long overdue. Since the top 1% of households clearly have the most skin in the game, if one (Read more...)