"State of Working America 2000-2001", from the Economic Policy Institute, 3/9/00.
epinet.org
Nice summary of Wall Street's great theft of middle America's future:
Household wealth mostly untouched by stock boom
Wealth is the total value of a household's assets minus its debts. The stock market
boom of the 1990s left the impression that most Americans were experiencing an
unprecedented growth in wealth. The truth, however, is that most Americans have
no economically meaningful stake in the stock market. The most recent government
data show that less than half of households hold stock in any form, including mutual
funds and 401(k)-style pension plans. The same data reveal that 64% of households
have stock holdings worth $5,000 or less.
The distribution of wealth remains highly unequal. The wealthiest 1% of households
control about 38% of national wealth, while the bottom 80% control only 17%. The
ownership of stocks is particularly unequal. The top 1% of stock owners hold almost
half (47.7%) of all stocks, by value, while the bottom 80% own just 4.1% of total stock
holdings.
The total wealth of the typical American household rose only marginally during the
1990s. The net worth of the average household in the middle 20% of the wealth
distribution rose about $2,200 in the 1990s-from $58,800 in 1989 to $61,000 in
1998. Over that same period, the value of the stock holdings of the typical
household grew by $5,500 and the value of non-stock assets grew by $8,500.
Meanwhile, typical household debt increased $11,800. The relatively modest gains
in stock and non-stock assets, combined with the explosion in household debt,
meant that the 1990s were far less generous to typical households than
business-page headlines often suggest.
For the typical household, rising debt, not a rising stock market, was the big story of
the 1990s. While households in the middle 20% of the wealth distribution captured
2.8% of the total growth in stock market holdings between 1989 and 1998, these
same families were saddled with 38.8% of the unprecedented rise in household debt.
While low nominal interest rates have made it easier for households to carry this
greatly expanded debt, many households appear to be straining. About 14% of
middle-income households have debt-service obligations that exceed 40% of their
income; 9% have at least one bill that is more than 60 days past due. Meanwhile,
despite the robust state of the economy, personal bankruptcy rates reached record
highs in the late 1990s. |
