Median Family Wealth Is at a 43-Year Low, Study Finds

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The idea that poor and middle-class Americans are suffering is nothing new: Anyone with access to the news (or, for that matter, to an ordinary suburban neighborhood) is likely to notice that it has gotten harder for average families to make ends meet. Beyond that, a veritable army of economists, politicians and pundits has spent the past few years pointing out the growing gap between the rich and everyone else.

Now, a recent study by New York University economics professor Edward N. Wolff has put the decline of the American middle class in a whole new perspective: According to Wolff's calculations, the median net worth of American households has now reached a 43-year low of $57,000 (in 2010 dollars).

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On the surface, the fact that American households are poorer and less stable than they were in 1969 is shocking. And the deeper one digs, the more it becomes clear that the situation is even worse than those headline numbers suggest.

The median, after all, is the midpoint, which means that there are an equal number of households above and below that line. And we don't have to go far below that line to find troubling data.

According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (in constant 1995 dollars) rose from 29.7 percent to 37.1 percent. And yes, that "less than $10,000" figure includes the many households with no assets at all, or "negative assets" -- what we in the non-academic world just call debt.

Where did all the money go? Over the same period, the richest 1 percent of households increased their average wealth by 71 percent.

Here's another way to gauge the shift in wealth: From 1983 to 2010 the share of total wealth held by the richest 10% of American households increased from 68.2 percent to 76.7 percent. All the rest of Americans lost ground.

Most studies of wealth inequality focus on salaries -- a rich arena for discussion when one considers that the average CEO takes home 380 times as much money as his or her average worker. By contrast, Wolff's focus on total wealth not only measures how much money a household brings in, but also the amount it accumulates. This latter number is highly significant -- economically secure households are generally more comfortable spending their disposable income, and are less likely to become a drag on the social safety net. With that in mind, Wolff's calculations don't just paint a worrisome picture of the present; they also suggest a dimmer economic future.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.


51 PHOTOS
Meet The Wealthiest Person In Each State
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Median Family Wealth Is at a 43-Year Low, Study Finds

John Martin is worth $210 million
Chairman and CEO of Gilead Sciences

Source: Wealth-x

Robert Stiller is worth $580 million
Founder of Green Mountain Coffee

Source: Wealth-x

Photo: Getty Images | Youtube/Champlainadmin

Martin Trust is worth $600 million
President of Brandot International, formerly president and CEO of MAST Industries

Source: Wealth-x

Jay Shidler is worth $680 million
Founder of the real estate company The Shidler Group

Source: Wealth-x

Photo: Alamy | Shidler.com

Robert Gillam is worth $690 million
President and CEO of McKinley Capital Management LLC.

Source: Wealth-x

Photo: Getty Images | The Gillam Foundation

Peyton Yates, Jr. is worth $760 million
President of Yates Petroleum Corp.

Source: Wealth-x

Photo: YouTube.com

Robert Gore is worth $830 million
Founder of materials and manufacturing company W.L. Gore & Associates

Source: Wealth-x

Photo: Gore.com

Leon Gorman is worth $860 million
Chairman of L.L. Bean

Source: Wealth-x

Gary Tharaldson is worth $900 million
Founder of the Tharaldson Companies

Source: Wealth-x

Photo: YouTube.com

Dennis Albaugh is worth $1 billion
Founder of Albaugh Inc.

Source: Wealth-x

Photo: YouTube.com

Bradley Wayne Hughes is worth $1.1 billion
Founder of Public Storage

Source: Wealth-x

Frank VanderSloot is worth $1.2 billion
CEO of Melaleuca

Source: Wealth-x

T. Denny Sanford is worth $1.3 billion
Chairman and CEO of United National Corp.

Source: Wealth-x

Thomas Benson is worth $1.3 billion
Owner of New Orleans Saints and New Orleans Hornets

Source: Wealth-x

Marguerite Harbert is worth $1.4 billion
Widow of the late construction and energy mogul John Murdoch Harbert III

Source: Wealth-x

Jim (James) Justice II is worth $1.5 billion
Owner of the coal mining Justice Companies

Source: Wealth-x

Christopher Cline is worth $1.5 billion
Founder of Foresight Energy

Source: Wealth-x

Jonathan Nelson is worth $1.6 billion
CEO of Providence Equity Partners

Source: Wealth-x

Anita Zucker is worth $2.2 billion
Chairwoman and CEO of chemical manufacturer InterTech Group

Source: Wealth-x

Photo: YouTube.com

Leslie Lampton is worth $2.4 billion
Founder of Ergon Inc.

Source: Wealth-x

Robert Earl Holding is worth $2.7 billion
Owner of Sinclair Oil

Source: Wealth-x

Thomas Frist, Jr. is worth $3 billion
Founder of HCA, the Hospital Corporation of America

Source: Wealth-x

Gayle Cook is worth $3.4 billion
Member of the board of directors of medical device firm Cook Group

Source: Wealth-x

Pauline MacMillan Keinath is worth $3.7 billion
Part owner of Cargill Inc. and great-granddaughter of founder W. W. Cargil

Source: Wealth-x

Theodore Lerner is worth $3.9 billion
Founder of real estate firm Lerner Enterprises

Source: Wealth-x

Samuel Zell is worth $3.9 billion
Founder of Equity Residential

Source: Wealth-x

Joseph Lewis is worth $3.9 billion
Founder of Tavistock Group and owner of Tottenham Hotspur soccer team in England

Source: Wealth-x

Bruce Halle Sr. is worth $4 billion
Founder of Discount Tire

Source: Wealth-x

Photo: YouTube.com

Leslie Wexner is worth $4.5 billion
Chairman and CEO of Limited Brands

Source: Wealth-x

Dennis Washington is worth $5 billion
Founder of The Washington Companies and co-founder of the Dennis and Phyllis Washington Foundation

Source: Wealth-x

Richard DeVos Sr. is worth $5.1 billion
Co-founder of Amway and owner of the Orlando Magic

Source: Wealth-x

David Tepper is worth $5.2 billion
President and founder of Appaloosa Management

Source: Wealth-x

John Menard, Jr. is worth $6 billion
Founder and owner of home-improvement retailer Menard Inc.

Source: Wealth-x

Photo: YouTube.com

James Goodnight is worth $7.4 billion
CEO of SAS Institute

Source: Wealth-X

Pennsylvania: Hansjorg Wyss is worth $7.7 billion
Chairman of Swiss medical device manufacturer Synthes Holding AG

Source: Wealth-x

Photo: tvbern/YouTube

Charles Ergen is worth $8.3 billion
Founder and chairman of DISH Network

Source: Wealth-x

George Kaiser is worth $10 billion
Chairman of BOK Financial

Source: Wealth-x

Photo: YouTube.com

Raymond Dalio is worth $10 billion
Founder of Bridgewater Associates LP

Source: Wealth-x

Anne Cox Chambers is worth $11.2 billion
Member of Cox Enterprises' board of directors, chairwoman of Atlanta Newspapers

Source: Wealth-x

Abigail Johnson is worth $11.9 billion
President, Fidelity Financial Services

Source: Wealth-x

Philip Knight is worth $13 billion
Chairman of Nike Inc.

Source: Wealth-x

Michael Dell is worth $14 billion
CEO of Dell Inc.

Source: Wealth-x

Forrest Mars, Jr. is worth $17 billion
Part-owner of Mars candy company and grandson of the late Frank C. Mars

Source: Wealth-x

Sheldon Adelson is worth $20.2 billion
Chairman and CEO of Las Vegas Sands

Source: Wealth-x

Michael Bloomberg is worth $24.8 billion
Mayor of New York City and the owner of Bloomberg LP

Source: Wealth-x

David Koch is worth $32.1 billion
Vice-chairman of Koch industries

Source: Wealth-x

Jim (James) Walton is worth $33.6 billion
Chairman of Arvest Bank and the son of Walmart founder Sam Walton

Source: Wealth-x

Lawrence Ellison is worth $41.1 billion
CEO of Oracle

Source: Wealth-x

Warren Buffett is worth $49.6 billion
Chairman and CEO of Berkshire Hathaway

Source: Wealth-x

Bill Gates is worth $64.5 billion
Microsoft chairman and co-chair of Bill and Melinda Gates Foundation.

Source: Wealth-x

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Correction: A previous version of this article did not specify that the statistic regarding the changes in the percentage of households with less than $10,000 in assets was figured using constant 1995 dollars, rather than constant 2010 dollars. We regret the error.
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