Fed Says Growth Lifts the Affluent, Leaving Behind Everyone Else

http://www.nytimes.com/2014/09/05/business/economy/least-affluent-families-incomes-are-declining-fed-survey-shows.html

By BINYAMIN APPELBAUMSEPT. 4, 2014

Economic growth since the Great Recession has improved the fortunes of the most affluent Americans even as the incomes and wealth of most American families continue to decline, the Federal Reserve said Thursday.

For the most affluent 10 percent of American families, average incomes rose by 10 percent from 2010 to 2013. For the rest of the population, average incomes were flat or falling.

The least affluent families had the largest declines. Average incomes dropped by 8 percent for the bottom 20 percent of families, the Fed reported in its triennial Survey of Consumer Finances, one of the most comprehensive sources of data on the financial health of American families.

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wealth also is increasingly concentrated. While overall wealth barely changed during the survey period, the money sloshed from the bottom toward the top. For the top 10 percent of families, ranked by income, estimated average wealth increased by 2 percent to $3.3 million. For the bottom 20 percent of families, average wealth sharply declined by 21 percent to $65,000.

There is growing evidence that inequality may be weighing on economic growth by keeping money disproportionately in the hands of those who already have so much they are less inclined to spend it.

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the top 3 percent of families collected 30.5 percent of all income in 2013, up from 27.7 percent in 2010, but still slightly below their 31.4 percent share in 2007.

The concentration of wealth continued without interruption, albeit at a slower pace during the recession. The Fed said that the top 3 percent of families held 44.8 percent of wealth in 1989, then 51.8 percent in 2007 and 54.4 percent in 2013.

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