Tanvi Misra is a staff writer for CityLab covering immigrant communities, housing, economic inequality, and culture. She also authors Navigator, a weekly newsletter for urban explorers (subscribe here). Her work also appears in The Atlantic, NPR, and BBC.
Wealth among high-income households is growing, while the middle-class is stuck in the 1990s.
The fact that America's richest households are financially head and shoulders above everyone else isn't exactly news, but now, it seems, the gap between them and the middle-class is the widest it's been since the Federal Reserve began collecting data 30 years ago. Yes, the Pew Research Center has found that in 2013, the median wealth of rich families was 6.6 times that of middle-income families, and 70 times that of low-income households. Since 1983, the upper tier has doubled its median wealth.
While high-income households have been climbing steadily up the wealth ladder over the last three years, the middle-class is in an economic rut. Middle-income households have been paralyzed since the recession, unable for to make up for what was lost. (Middle- and low-income household wealth fell by around 40 percent in 2007, while median wealth of the upper tier declined by 17 percent—so the rich didn't have as much catching up to do). Between 2010 and 2013, America's high-income households have raised their median wealth by an average of $44,000, while middle-income wealth has remained stagnant.
This explains why, despite added jobs and better earnings reports, a majority of Americans are still not cheery about the economy—the middle-class and low-income population (and especially, racial and ethnic minorities) have yet to really start their recoveries. Their wealth has receded to early 1990s-levels, and so far, it's staying there.