Wednesday, December 19, 2012
Growth In Wealth Over 27 Years Very Unequally Distributed
One of the reasons for the maldistribution of growth in wealth is due to the loss of wealth by the bottom 80%. The major asset class in that group is the equity in their homes. Most of that wealth was lost with the bursting of the housing bubble. Those in the top 5% are the major owners of corporate stocks and other securities. That asset class has performed much better over 27 years.
The unequal distribution of wealth contributes to unequal growth in income. Those in the top 5% earn incomes from capital gains and dividends which are not available to most households in the bottom 80%.