Whenever I see stats like this that don't account for age, I ignore them. They are worthless.
It compares a recent Stanford grad from a wealthy family to a 55-year-old who was scraping through the first 35-40 years of life, but now makes $190k/yr as a successful tradesman during boom time. The former will count as "poor" and the latter will count as "top 10%".
In other words, no, it's not comparing Americans of different classes. It's comparing Americans at different stages of life. Or just the ebb and flow of income over and individual's life (selling a house even in a modest area can easily put you into the top 10% for a year).
You need to follow individuals over their lives to get a better picture of who is struggling and who is thriving.
That's a myth. There's plenty of data on this. Most American never get anywhere close to the top 10% - not even remotely - regardless of age. The idea that everyone is just waiting around for their career to advance enough to put them in the upper-middle class is ludicrous on its face. Just as ludicrous as the myth that only high school kids work for minimum wage.
That's a fair point assuming upward economic mobility in the U.S but statistically speaking it's more likely someone stays rich or stays poor than it is that they move upward into a different bracket entirely
While it is true that much of the recent wealth in the U.S. is self-made and not entirely inherited. It's also true that a child born poor in this country is far more likely to stay as such than they are to become part of the top 10%.
If we lived in an egalitarian society, then pointing out the wealth of the top 10% might be divisive, but considering that our current wealth inequality is worst than 1774 France, then I believe it's a fairly accurate picture being painted.
Am I the only one seeing a lot of headlines pitting top 10% against the rest? It’s disingenuous to make up headlines like this without mentioning too 10% consists of, you guessed it, top 1% which owns more than 50% of all the stocks.
I think you're confusing "income" for "wealth". The wealthiest people are the people with the most assets. You don't pop into the top 10% just by selling a house. That doesn't affect your wealth at all.
The wealthiest do tend to be older because they've accrued wealth over a lifetime, but it's definitely not true that if you're old, you're wealthy.
Yes. This same kind of error also applies to racial comparisons. A large component of racial disparate in income is caused by age gap. One would assume that different races have the same age distribution, but in reality it is not. The difference is huge, see: https://www.pewresearch.org/fact-tank/2019/07/30/most-common...
I'll go along with your point. Demographics of the US skew heavily towards the old. If your hypothesis were true, you'd expect to see the wealth distributed roughly with age.
While there is a correlation of net worth and age, there is no age band [0] where the median net worth is even 2/3 of the 75th percentile population net worth. [1]
Age is not a major explanatory factor in wealth inequality. (The fact that the mean income in the 35-44 age range is much greater than the median income at the 65-74 age range, that has the highest median of any age range, also underlines this.)
> it's not comparing Americans of different classes. It's comparing Americans at different stages of life. Or just the ebb and flow of income over and individual's life
no, what we should really measure is property, ownership. the richest people pay little to no income. many years ago, before i learned about today's economic system, i remember being impressed upon hearing that Steve Jobs only took a $1 salary. now i know this is just incredibly beneficial tax-wise (along with a bunch of other tricks that aren't available to the non-propertied class).
seriously all this talk about 'measuring income' or whatever is just a distraction from the underlying property systems and relations in our current system.
"In the coming years you’ll read a lot of columns agonising over how to ‘fix’ Silicon Valley. Most will be technocratic, evacuating politics from the discussion. This is, after all, the framing that allowed Silicon Valley to grow so powerful in the first place: a binary choice between technological development on capital’s terms, or remaining stuck in the past. But structural problems require structural solutions. Rather than relying on ‘ethical’ founders or investors to change the system, we need collective action to challenge it.
This will mean undoing the labyrinth of intellectual property rights, which are intended to protect corporations and commodify information. It will mean revisiting the funding model that gave rise to the ‘go-big-or-go-home’ culture responsible for so many wasteful start-ups, shifting away from the return-driven venture capital model, and towards a state-backed social entrepreneurship with public responsibilities.
It will also mean building worker power, within the tech industry and beyond it. Within it, the long-term goal must be a union culture encompassing all workers involved in production. That means not just the highly-paid software engineers but contractors packing boxes for Amazon, or driving for Uber, or cleaning offices in Silicon Valley should all have representation in decision-making structures. And beyond the confines of the industry, a wider-organised labour movement needs to offer resistance to technology being used to facilitate increased worker exploitation through surveillance or regulatory arbitrage.
None of this will be easy, of course. Reclaiming the emancipatory potential of technology will require prying it from the clutches of capital. But that is a worthy fight. If the task of politics is to imagine a different world, then the job of technology is to help us get there. Whether technology is developed for the right ends — for the public good, instead of creating a privatised dystopia — will depend on the outcome of political struggles."
What this effectively means is, that ten percent exercises majority control over huge portions of the US economy. That ten percent is the group making decisions on how to direct huge amounts of resources created by our economy. Such a healthy democracy.
With the advent of AI, wealth inequality is probably going to widen. Manual work is getting less and less valuable while ownership of the machines that do the work is getting more and more valuable.
I wonder if the wealth inequality is growing via transfer - aka "The rich get richer and the poor get poorer" - or if everybody is getting richer and the rich just get richer faster?
A good way to look at this might be some measure of the living standard / quality of life.
Over the last 10 years for example - did it go up for everyone? Or did it go up for some and down for some?
"A good way to look at this might be some measure of the living standard / quality of life."
We have a lower percentage of the populace that is poor--but they still live with little or no access to health care, in poor housing with problems (pests, access to clean resources, food supply, rampant violent criminal activity, etc.) and in other conditions such that they may as well be in corrugated metal shanties with dirty water and little/no access to electricity and other "amenities".
The living standard and quality of life for poor americans is marginally better than for poor people in third-world countries. We put a better spin on it and (ab)use statistics to paint a better picture.
I don't have good sources handy right now, but from the research I've read, it seems mostly like (on a multi-decade scale) the poorest have gotten moderately richer, the middle classes has stagnated at best, the upper-middle class has gotten moderately richer, and the richest have gotten much much richer.
>> or is everybody getting richer but the rich get richer faster?
There is some truth to this statement. Just a few years ago (20018), the US added a record number of millionaires:
The number of millionaire households in the U.S. jumped by more than 700,000 last year, thanks to surging stock prices and housing values, according to a new report.
The U.S. now has more than 11 million millionaire households, according to Spectrem Group, up more than 6 percent from 2016. The number of new millionaires and the total population of millionaires set records. Spectrem defines millionaire households as those with at least $1 million in investible assets, not including primary residence.
Since the financial crisis, the number of millionaire households has nearly doubled. In 2009, there were just under 6 million millionaire households. It’s grown every year since, and is now well past the precrisis level of 9 million millionaires.
During the Industrial Revolution the owners of the factories became richer and richer and the workers got poorer and poorer. I seem to remember some quote about the workers "seizing the means of production"... I wonder what that looks like with AI?
In my experience, manual work seems to be getting more and more valuable, at least in the US, and it's because you cannot computerize wiring a house or pouring a concrete foundation or plumbing a bathroom.
Isn't that because normal people are heavily encouraged to put all their money into buying a house? Culturally ("rent is just throwing money away" / "the stock market is a casino"), with financial incentives (mortgage interest deduction, SALT deduction, Fannie/Freddy insured 30 year mortgages), and quality of life (school districting/social services or lack thereof), we get people to put every dollar they can into buying a house. Or more than one (apparently everyone aspires to be an amateur landlord). Consequently, you need to have a lot of money before you've bought enough house to move onto buying stocks.
If renting and investing were more normalized and encouraged, I'd expect a different ratio of real estate : financial asset ownership.
Keep in mind that most people are their wealthiest at retirement age. People near retirement tend to have a lot invested. People under 30 make up 50% of the population - but will not be their wealthiest for another 30 years.
But in 30 years, those same people will also have significant amounts of savings (ideally).
Not at all saying that there are no issues with wealth distribution, or stock-ownership-distribution. But the top 10% aren't necessarily the "elites". They could also just be your parents.
I expected an even more unequal distribution.
Owning stocks is risky, and stock portfolios are mostly bought with money people don't need to live on a day to day basis.
The poor simply can't afford stocks, and I expect the middle class to make different kinds of investment. Like property (buy a house), and low risk saving accounts that may be backed by stocks but the owner of the account is not the owner of the stocks. There may be a small part of gamblers who play the stock market like they are in Vegas, but I expect most stocks to be owned by very rich individuals or institutions, who can mitigate the risks by having lots of stocks, and also have some amount of control on the companies they invested into, rather than a millionth of a vote for small investors. Among the institutions are the ones that provide financial services to the middle class.
No, the interest rates for retail savings accounts are zero (or near as makes no difference), and have been for at least two decades. Basically everybody knows that they are completely useless by now, and that even "regular" people need to move to bonds or stocks in order to see any kind of return.
I'm not sure you need to be very rich, or an institution to diversify. In fact, it's never been easier to own hundreds, or thousands, of stocks as an individual. All you need to do is buy etfs.
Perhaps this is a foolish question, but how do retirement accounts fit into this? I assume many of us have retirement accounts that own parts of mutual funds or ETFs, are those counted, or are the banks that managed those considered the "owner" and we're just getting a share?
They're included, which makes the headline (and article itself) mostly meaningless. Yeah, I have >$1million in the market, but it's almost all via funds in my 401k. I'm not actively voting on any of the companies and I largely don't even know which companies I hold.
It would be more interesting to know what % of the market the top-1% hold.
I assume this is through mutual funds and ETF's? I would think it riskier to actually own the stock directly unless this headline is biased by the founders of the key NASDAQ stocks owning 80% of the 89% (by value) by dint of being founders...
It would be more interesting to see the breakdown of what's held in retirement and pension accounts vs. post-tax accounts.
This makes a lot more sense when you consider that the vast, vast majority of accumulated wealth over the last 100 years is corporate wealth.
To depoliticize ... I would interpret this statistic as an indication of the correlation between wealth and corporate stock ownership, which is almost tautological. If you own or help run a public company you are probably very rich.
And even in the hypothetical case where more of the "90%" are benefiting from stock ownership than ever, this statistic will always simply highlight the reality that running or owning a business makes you money.
How is it that the article says 100% of _all_ the U.S. stocks are owned by Americans? Aren’t foreigners able to own U.S. stocks? Investopedia says they can.
Maybe 10% of americans are close to retirement age, and have been saving all their life in something called a 401k, which happens to be stock.
That would be ... not very outragous.
Sure, you can say 89% of stocks is too much and there must be other factors at work. But I refuse to be outraged until we control for the non-outragous factors, and see what remains.
I don’t know what to make of this statistic. Wealth begets wealth so this is not surprising. Stocks are not a limited scarce resource so it’s not like the top are hoarding them. A more interesting stat would be to see if the bottom 90% increased their stock holdings or not. It would be a shame if that reduced for some population bracket.
To me, this simply shows how inequal the american society has become, and how the stock market amplifies it.
You can have an impact on the real economy with stocks. Look at what happened with GameStop. But that impact is done and decided by the wealthiest, who will reap the benefits of it.
But if you live paychecks by paychecks, having no money to put into stocks, you just suffer the consequences of this impact.
> Stocks are not a limited scarce resource so it’s not like the top are hoarding them.
How are stocks not a limited resource? I know companies occasionally issue new stock to rise capital for new business ventures but that doesn’t happen that often no?
It doesn't if you tax capital gains properly. It's more important to speak of relative ownership as that reflects the change in power held by the 90% majority of Americans - it's vanishing before your eyes.
> Stocks are not a limited scarce resource so it’s not like the top are hoarding them.
Securities are by definition limited. Splits and IPOs are the only places stocks are born, and those are carefully regulated.
And... while the language is inflammatory, it seems to me like the top are meeting the definition of "hoarding" them. That's what owning 89% of something means.
The bottom 90% of Americans held about 11% of stocks, and added $1.2 trillion in wealth during the Covid-19 pandemic.
The top 10% saw the value of their stocks gain 43% between January 2020 and June of 2021, according to the Fed. The bottom 90% saw stock wealth rise at a lower rate — 33%.
Really? Most discussions on inequality I witnessed focused on the ultra-rich: Bezos, Musk and so on. I actually think it would make sense to include the upper middle class as well.
The top 10% demographic is made up mostly by people who consider themselves middle class. The 10th percentile income is like $180k/year, or a little more than an entry level FAANG job. The 1% borderline is a little over half a million dollars, and while obviously very comfortable is not a lifestyle something people would consider genuinely "rich".
So, yeah. It's stocks owned by these folks -- people with normal houses and normal cars and normal jobs, but with a ton of disposable income to stuff into Robinhood accounts -- that seem the most unfairly distributed.
So 40% of US stocks are owned by foreigners. 30% by pensions funds? And now 89% owned by the top 10% of Americans making 159% ???
I would guess the correct headline is something like "of the shares held directly by private American individuals the brokerage accounts of the top 10% hold 89% of those shares". Which sounds perfectly plausible.
Does the article writer understand this or are they confused as to the meaning? Is this artical and discussion just gibberish all the way down or is it me whose not understanding?
Keep in mind, that this statistic doesn't necessarily mean that the top 10% own a lot of wealth. if the bottom 89% owns a total of 10$ worth of wealth then the top 10% isn't doing any better. take all that wealth and calculate what it would be if it was divided by 300 million people and then divide that number by the number of years it takes to acquire that wealth and you'll find, it's not very much wealth at all.
[+] [-] chmod600|4 years ago|reply
It compares a recent Stanford grad from a wealthy family to a 55-year-old who was scraping through the first 35-40 years of life, but now makes $190k/yr as a successful tradesman during boom time. The former will count as "poor" and the latter will count as "top 10%".
In other words, no, it's not comparing Americans of different classes. It's comparing Americans at different stages of life. Or just the ebb and flow of income over and individual's life (selling a house even in a modest area can easily put you into the top 10% for a year).
You need to follow individuals over their lives to get a better picture of who is struggling and who is thriving.
[+] [-] standardUser|4 years ago|reply
[+] [-] ricardoplouis|4 years ago|reply
https://www.forbes.com/sites/aparnamathur/2018/07/16/the-u-s...
While it is true that much of the recent wealth in the U.S. is self-made and not entirely inherited. It's also true that a child born poor in this country is far more likely to stay as such than they are to become part of the top 10%.
If we lived in an egalitarian society, then pointing out the wealth of the top 10% might be divisive, but considering that our current wealth inequality is worst than 1774 France, then I believe it's a fairly accurate picture being painted.
https://www.theatlantic.com/business/archive/2012/09/us-inco...
[+] [-] darth_avocado|4 years ago|reply
[+] [-] spywaregorilla|4 years ago|reply
The wealthiest do tend to be older because they've accrued wealth over a lifetime, but it's definitely not true that if you're old, you're wealthy.
Wealth is not income, and neither are class.
[+] [-] temp8964|4 years ago|reply
[+] [-] simonebrunozzi|4 years ago|reply
This, this, 100 times this. I wish I could upvote you 100 times. Yes, exactly that. I agree with you 100% on this.
[+] [-] btbuildem|4 years ago|reply
[+] [-] dragonwriter|4 years ago|reply
Age is not a major explanatory factor in wealth inequality. (The fact that the mean income in the 35-44 age range is much greater than the median income at the 65-74 age range, that has the highest median of any age range, also underlines this.)
[0] https://www.visualcapitalist.com/visualizing-net-worth-by-ag...
[1] https://dqydj.com/average-median-top-net-worth-percentiles/
[+] [-] beckman466|4 years ago|reply
no, what we should really measure is property, ownership. the richest people pay little to no income. many years ago, before i learned about today's economic system, i remember being impressed upon hearing that Steve Jobs only took a $1 salary. now i know this is just incredibly beneficial tax-wise (along with a bunch of other tricks that aren't available to the non-propertied class).
seriously all this talk about 'measuring income' or whatever is just a distraction from the underlying property systems and relations in our current system.
"In the coming years you’ll read a lot of columns agonising over how to ‘fix’ Silicon Valley. Most will be technocratic, evacuating politics from the discussion. This is, after all, the framing that allowed Silicon Valley to grow so powerful in the first place: a binary choice between technological development on capital’s terms, or remaining stuck in the past. But structural problems require structural solutions. Rather than relying on ‘ethical’ founders or investors to change the system, we need collective action to challenge it.
This will mean undoing the labyrinth of intellectual property rights, which are intended to protect corporations and commodify information. It will mean revisiting the funding model that gave rise to the ‘go-big-or-go-home’ culture responsible for so many wasteful start-ups, shifting away from the return-driven venture capital model, and towards a state-backed social entrepreneurship with public responsibilities.
It will also mean building worker power, within the tech industry and beyond it. Within it, the long-term goal must be a union culture encompassing all workers involved in production. That means not just the highly-paid software engineers but contractors packing boxes for Amazon, or driving for Uber, or cleaning offices in Silicon Valley should all have representation in decision-making structures. And beyond the confines of the industry, a wider-organised labour movement needs to offer resistance to technology being used to facilitate increased worker exploitation through surveillance or regulatory arbitrage.
None of this will be easy, of course. Reclaiming the emancipatory potential of technology will require prying it from the clutches of capital. But that is a worthy fight. If the task of politics is to imagine a different world, then the job of technology is to help us get there. Whether technology is developed for the right ends — for the public good, instead of creating a privatised dystopia — will depend on the outcome of political struggles."
https://tribunemag.co.uk/2019/01/abolish-silicon-valley
[+] [-] downWidOutaFite|4 years ago|reply
[+] [-] brightstep|4 years ago|reply
[+] [-] pwned1|4 years ago|reply
https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-...
[+] [-] mg|4 years ago|reply
I wonder if the wealth inequality is growing via transfer - aka "The rich get richer and the poor get poorer" - or if everybody is getting richer and the rich just get richer faster?
A good way to look at this might be some measure of the living standard / quality of life.
Over the last 10 years for example - did it go up for everyone? Or did it go up for some and down for some?
[+] [-] sidlls|4 years ago|reply
We have a lower percentage of the populace that is poor--but they still live with little or no access to health care, in poor housing with problems (pests, access to clean resources, food supply, rampant violent criminal activity, etc.) and in other conditions such that they may as well be in corrugated metal shanties with dirty water and little/no access to electricity and other "amenities".
The living standard and quality of life for poor americans is marginally better than for poor people in third-world countries. We put a better spin on it and (ab)use statistics to paint a better picture.
[+] [-] nerdponx|4 years ago|reply
[+] [-] at-fates-hands|4 years ago|reply
There is some truth to this statement. Just a few years ago (20018), the US added a record number of millionaires:
The number of millionaire households in the U.S. jumped by more than 700,000 last year, thanks to surging stock prices and housing values, according to a new report.
The U.S. now has more than 11 million millionaire households, according to Spectrem Group, up more than 6 percent from 2016. The number of new millionaires and the total population of millionaires set records. Spectrem defines millionaire households as those with at least $1 million in investible assets, not including primary residence.
Since the financial crisis, the number of millionaire households has nearly doubled. In 2009, there were just under 6 million millionaire households. It’s grown every year since, and is now well past the precrisis level of 9 million millionaires.
https://www.cnbc.com/2018/03/21/us-added-700000-new-milliona...
[+] [-] boringg|4 years ago|reply
[+] [-] mprovost|4 years ago|reply
[+] [-] missedthecue|4 years ago|reply
[+] [-] zacherates|4 years ago|reply
If renting and investing were more normalized and encouraged, I'd expect a different ratio of real estate : financial asset ownership.
[+] [-] yathern|4 years ago|reply
But in 30 years, those same people will also have significant amounts of savings (ideally).
Not at all saying that there are no issues with wealth distribution, or stock-ownership-distribution. But the top 10% aren't necessarily the "elites". They could also just be your parents.
[+] [-] GuB-42|4 years ago|reply
The poor simply can't afford stocks, and I expect the middle class to make different kinds of investment. Like property (buy a house), and low risk saving accounts that may be backed by stocks but the owner of the account is not the owner of the stocks. There may be a small part of gamblers who play the stock market like they are in Vegas, but I expect most stocks to be owned by very rich individuals or institutions, who can mitigate the risks by having lots of stocks, and also have some amount of control on the companies they invested into, rather than a millionth of a vote for small investors. Among the institutions are the ones that provide financial services to the middle class.
[+] [-] ohazi|4 years ago|reply
No, the interest rates for retail savings accounts are zero (or near as makes no difference), and have been for at least two decades. Basically everybody knows that they are completely useless by now, and that even "regular" people need to move to bonds or stocks in order to see any kind of return.
[+] [-] karma_daemon|4 years ago|reply
[+] [-] lexapro|4 years ago|reply
[+] [-] stinkytaco|4 years ago|reply
[+] [-] alistairSH|4 years ago|reply
It would be more interesting to know what % of the market the top-1% hold.
[+] [-] jleyank|4 years ago|reply
It would be more interesting to see the breakdown of what's held in retirement and pension accounts vs. post-tax accounts.
[+] [-] bfrog|4 years ago|reply
[+] [-] xikrib|4 years ago|reply
To depoliticize ... I would interpret this statistic as an indication of the correlation between wealth and corporate stock ownership, which is almost tautological. If you own or help run a public company you are probably very rich.
And even in the hypothetical case where more of the "90%" are benefiting from stock ownership than ever, this statistic will always simply highlight the reality that running or owning a business makes you money.
[+] [-] ggregoire|4 years ago|reply
https://www.investopedia.com/ask/answers/05/foreignownership...
[+] [-] haolez|4 years ago|reply
[+] [-] chmod600|4 years ago|reply
That would be ... not very outragous.
Sure, you can say 89% of stocks is too much and there must be other factors at work. But I refuse to be outraged until we control for the non-outragous factors, and see what remains.
[+] [-] yalogin|4 years ago|reply
[+] [-] louis___|4 years ago|reply
You can have an impact on the real economy with stocks. Look at what happened with GameStop. But that impact is done and decided by the wealthiest, who will reap the benefits of it.
But if you live paychecks by paychecks, having no money to put into stocks, you just suffer the consequences of this impact.
[+] [-] worrycue|4 years ago|reply
How are stocks not a limited resource? I know companies occasionally issue new stock to rise capital for new business ventures but that doesn’t happen that often no?
[+] [-] ResearchCode|4 years ago|reply
[+] [-] newacct583|4 years ago|reply
Securities are by definition limited. Splits and IPOs are the only places stocks are born, and those are carefully regulated.
And... while the language is inflammatory, it seems to me like the top are meeting the definition of "hoarding" them. That's what owning 89% of something means.
[+] [-] tshaddox|4 years ago|reply
[+] [-] pwned1|4 years ago|reply
The bottom 90% of Americans held about 11% of stocks, and added $1.2 trillion in wealth during the Covid-19 pandemic.
The top 10% saw the value of their stocks gain 43% between January 2020 and June of 2021, according to the Fed. The bottom 90% saw stock wealth rise at a lower rate — 33%.
[+] [-] Grustaf|4 years ago|reply
[+] [-] lexapro|4 years ago|reply
[+] [-] newacct583|4 years ago|reply
So, yeah. It's stocks owned by these folks -- people with normal houses and normal cars and normal jobs, but with a ton of disposable income to stuff into Robinhood accounts -- that seem the most unfairly distributed.
[+] [-] burkaman|4 years ago|reply
Mainstream discussions are generally about "the 1%" vs. everyone else, or Biden's income threshold of $400,000 (the top ~5%).
[+] [-] paulpauper|4 years ago|reply
[+] [-] defaultprimate|4 years ago|reply
https://www.aei.org/carpe-diem/evidence-shows-significant-in...
[+] [-] CGamesPlay|4 years ago|reply
[+] [-] gandalfian|4 years ago|reply
I would guess the correct headline is something like "of the shares held directly by private American individuals the brokerage accounts of the top 10% hold 89% of those shares". Which sounds perfectly plausible.
Does the article writer understand this or are they confused as to the meaning? Is this artical and discussion just gibberish all the way down or is it me whose not understanding?
[+] [-] throw8383833jj|4 years ago|reply