The Federal Reserve has once again counted up America’s personal wealth — and omitted the nation’s 400 richest from the final tally. But the new figures, even with that omission, show a divide still deepening.
In the middle of middle America — in a suburb just outside of Dayton, Ohio — funeral home owner Anne Dunbar has noticed a rather unnerving new trend.
Families used to want the obituary notices that Dunbar writes up to include a pitch for donations to their dear departed’s favorite charity. Some families are now requesting notices that ask for donations toward their funeral expenses.
You won’t find Anne Dunbar’s story — or any other anecdote about the collapse of America’s middle class — in the latest Changes in U.S. Family Finances study the Federal Reserve Board released last Monday.
What you will find: the most exhaustive set of numbers yet on the devastation that the Great Recession and decades of rising inequality have wreaked on average American families.
Most Americans, the new data help make plain, have essentially spent the last 20 years on a go-nowhere treadmill. They’re working longer and harder and have zero new wealth to show for their labor.
In 2010, the net worth of the median, or most typical, American family stood at $77,300, about the same net worth, after taking inflation into account, that the typical American family held back in the early 1990s.
Most U.S. families today have the bulk of their net worth sitting as equity in their homes. The pop of the housing bubble has zapped that equity. Between 2007 and 2010, notes the new Fed study, typical American families lost 40 percent of their total net worth. The housing crash accounted for three-quarters of that plummet.
But home values, the Fed study reports, haven’t been the only aspect of middle class economic life to take a significant hit. Incomes have plunged as well. The take-homeof the typical American family, after taking inflation into account, dropped 7.7 percent in the three years after 2007, down to $45,800.
All these numbers come from the Federal Reserve’s Survey of Consumer Finances, an intense series of field interviews the Fed conducts every three years. The interviews usually run an hour and a half, but can last — for families with complicated financial situations — twice that long.
Fed researchers completed just under 6,500 of these in-depth interviews for the 2010 Survey of Consumer Finances. The Fed selected 5,000 of these families through a random sampling of American households.
But random samplings don’t generate enough wealthy households to give a statistically rich enough sense of life at America’s economic summit. To help spotlight that summit, Fed researchers supplemented their basic 2010 sample with a list of another 1,500 families, all affluent, identified through tax records.
The resulting data from all these interviews paint the most statistically comprehensive portrait of personal wealth in America available anywhere. But this portrait has one gaping hole. For confidentiality reasons, the Federal Reserve excludes from the Survey of Consumer Finances interview process any family that appears on the annual Forbes 400 list of America’s richest.
That exclusion means that the new Federal Reserve numbers for 2010 understate — by $1.37 trillion, the total wealth of that year’s Forbes 400 — America’s actual level of wealth concentration.
The Federal Reserve Changes in U.S. Family Finances report released last week doesn’t much concentrate on that concentration. The report offers no specific wealth and income breakouts for America’s top 1 percent. Analyses at that level will have to wait until scholars get their hands on the micro data that the Fed’s 2010 Survey of Consumer Finances has generated.
The new Fed study does give us income and wealth breakdowns for America’s top 10 percent, those families that made over $142,000 in 2010. These families averaged $2.9 million in net worth, about 15 times the $199,000 average net worth of families in America’s middle 20 percent.
Between 2001 and 2010, America’s top 10 percent gained net worth. Over that same span, all income brackets below the top 10 percent lost net worth.
Major swatches of American families below the top 10 percent tier, the Fed numbers also show, remain deep in debt. In 2007, only 56.4 percent of the nation’s families found themselves able to do any saving. In 2010, even fewer families — just 52 percent of the total — saved any money.
Those families struggling the hardest? The new Fed data give that unsought distinction to families headed by 35- to 44 year-olds. Just 47.8 percent of these families did any saving in 2010. Between 2007 and 2010, their net worth fell a stunning 54 percent, down to $42,100.
Add together the net worth of over 80,000 of these families in 2010 and you’ll have a fortune that equals the net worth of a single average deep pocket on that 2010 Forbes list of America’s 400 richest.