
The richest 10% of households now represent 70% of all U.S. wealth - whack
https://www.marketwatch.com/story/the-richest-10-of-households-now-represent-70-of-all-us-wealth-2019-05-24?
======
partiallypro
This is basically the Pareto principle in action, and isn't surprising.

Most of the top tier wealth is driven by investments and in the wake of
globalization (and "easy" money from CBs,) stocks and other asset classes have
risen drastically. Given that the lower rungs in the world all have little to
no investments compared to the "upper class" it's just basic math than people
with investments will out perform those with none.

There will undoubtedly be a mean reversion on asset prices at some point in
the future, which will lower the wealth gap as prices fall...but that might
not be a good thing. What we really need, if we want to bridge the gap, imo,
is teaching people to invest their money...and I mean in more than just a 401K
and a house. If you look at actual living standards, even the middle and lower
classes are in much better shape than they were in every previous decade. So
we're making strides there. So we need to improve our education system
(specifically for the lower class) and teach everyone to invest in the economy
as a whole.

~~~
idlewords
The thing about poor people is, they don't have money to invest. Teaching the
poor to invest is like teaching the starving to cook.

Moreover, you are simply not correct to say that living standards are
improving for everyone. Life expectancy in the United States has gone down for
the third year running (the first time that's happened since WWI) due in large
part to crises that disproportionately affect poor people.

~~~
partiallypro
Life expectancy has gone down because of the Opioid crisis and suicides. That
certainly does effect poor people, but it is not -because- they are poor.

And poor people usually do have money to invest, I grew up very poor. My grand
mother had no plumbing, no A/C or central heating (and this is the US,) so I
know what true poverty is. You will not find that virtually anywhere in the US
now.

~~~
scruple
> Life expectancy has gone down because of the Opioid crisis and suicides.
> That certainly does effect poor people, but it is not -because- they are
> poor.

I beg to differ. The area where I grew up, in rural southeastern Ohio, has
been ravaged by the opioid crisis. IMHO, it goes hand-in-hand with the loss of
industry and jobs and the rise of poverty and hopelessness that's been left in
the wake of that loss of economic prosperity.

~~~
scarface74
Not directed at you, but I find it amazing that now that drugs are hitting
“rural America” it is seen as caused by the lack of opportunity, jobs, and
social mobility but when it was happening in the “inner city” it was all about
“pulling yourself up by your bootstraps”, “the government doesn’t owe you
anything” and because of a “culture of dependency”.

------
deogeo
My comment from when this was posted a few days ago: "In other terms, top 1%
owns 32%, leaving 38% for the 9% below that."

~~~
necovek
The most interesting bit is that out of that 10 percentage points growth (60%
to 70%) for the 10% wealthiest, 9 percentage points are attributed to the top
1% (23% to 32%)!

So, the rest of the top 10% have remained basically at the same level of
(relative) wealth (37% to 38%), and the wealth from the poorest has moved to
the top 1%!

So, looking at the top 10% here paints a _less bleak_ picture of where the
wealth is being accumulated/moved.

IOW, it's not even the rich getting richer, it's just the super rich!

~~~
mont
How do you interpret less people owning a greater percentage of overall wealth
as a less bleak picture?

~~~
necovek
Perhaps you misread what I said: looking at the top 10% rather than top 1%
implies that more people are getting proportionally wealthier, when it's only
the 1% that is getting wealthier. The former implication is "less bleak" than
the latter reality.

------
refurb
Top 10%? That would include a lot of HN folks reading this article.

And I'm sure the housing crash of 2008 didn't help. Real estate is often a key
financial investment for the middle class. Housing has recovered (and more!),
but a lot of middle class lost/sold their homes and didn't benefit from the
appreciation.

~~~
kasey_junk
Just to put some numbers on it 2017 you'd need a net worth of about 1.1
million dollars to be in the top 10%.

[https://dqydj.com/net-worth-brackets-wealth-brackets-one-
per...](https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/)

~~~
djsumdog
What would annual income requirements be? I remember a few years ago when I
looked it up, the 1% of top income earners was somewhere around
$350~$400k/year minimum (depending on which stat you used). Think about that.
Less than 1% of Americans ear over $350k/yr ... and most of them earn far far
more than than (several million).

I assume the average senior developer here in a mid-range city probably makes
around $120k ~ $160k. Where does that fall into national averages on just
income (and yes, I realize this article is talking about overall wealth and
not necessarily income).

~~~
scarface74
The Don’t Quit Your Day Job site linked above, also has that info.

[https://dqydj.com/household-income-percentile-
calculator/](https://dqydj.com/household-income-percentile-calculator/)

------
whb07
This of course is a big side effect of quantitative easing aka printing money.
Those who held on to securities and other advanced financial instruments saw
prices being pulled upward due to the massive flood of hot off the press
money.

Guess what people don’t own large number of those types of assets?

So before everyone does the typical “we should get government involved” rabble
rousing, be aware that it is because the government got involved that this is
happening.

~~~
necovek
I am not from US, but I remember loud complaints about how Federal Reserve was
bailing out banks and the rich vs the non-wealthy folks. My memory of govt
reasoning was that they need to help the economy survive to avoid unfamiliar
consequences (if they bankrupted the banks for giving bad loans and let home
buyers keep their not fully paid homes, the argument was that crediting would
stop in the future, which would be a bigger detriment to the not-wealthy).

IOW, government got involved on behalf of the rich claiming to also benefit
non-wealthy in the long run.

This is all a bit simplified, and coming from someone only affected
transitively (so without full focus on the developments).

------
Expez
There's so much talk about the growing inequality that I tried to find out
what would happen if the rich were mobbed and all the money redistributed.

According to [0] there were 73,110 ultra wealthy US citizens in 2017, i.e.
individuals with more than $30m in net worth. The same article says that the
average net worth in this group is $120m.

In aggregate this group thus controls 120m * 77 110 = 9.3 trillion dollars.

Since there are around 330m people living in the US this would amount to only
a little over 28k per person when redistributed.

[0] [http://money.com/money/4833875/ultra-wealthy-americans-
milli...](http://money.com/money/4833875/ultra-wealthy-americans-millionaire-
billionaire/)

~~~
mcphage
So you're saying, by redistributing wealth from _only 73k people_ , everybody
in the country would get almost $30,000?

That's... that's a lot. And that's only from the top 0.02%.

------
duxup
So we have a trend going up.

In the past what has driven this trend downward?

~~~
bryanlarsen
The real estate bubble popping. To a first approximation the bottom 9.9% of
the top 10% in wealth are older upper-middle class folks who have their
mortgage paid off and some retirement savings.

(Wealth and income distributions have significant differences)

~~~
cabaalis
Is this elaborated on anywhere to break down by age/etc? Because "9.9% of that
10% of households are actually just your parents/grandparents who've made good
choices over the course of their life rather than a bunch of bankers" doesn't
trigger people as much.

------
bin0
Some one quoted a number that you need about $1mm in income to be in the top
1%. You know what's perverse? "Qualified investor" mark is at $1mm net worth.
The best way to make money is to invest what you have, and this blocks people
out.

From what I understand, it might be possible to set up a partnership which
does investments, and pool money from about 50 partners. That would allow a
decent angel investment group with a few-thousand-dollar buy in. Why don't
more people do this? It's very doable to learn about how to read a business
plan, read financials, etc. Though it's a risk, it might be helpful to allow
the middle class to make informed investments to grow wealth.

------
bigredhdl
The linked fed report is a good read.
[https://www.federalreserve.gov/econres/feds/files/2019017pap...](https://www.federalreserve.gov/econres/feds/files/2019017pap.pdf)

------
scarface74
In the grand scheme of things, not that I think it would make that much of a
difference, but how would the wealth of the middle class that are close to
retirement be different if you counted the present value of annuities such as
pension plans and even maybe social security?

I know my parents could afford to have a lot less “wealth” and be comfortable
thanks to my mom’s pension as a public school employee.

On the other hand, how much worse off is the middle class now that private
pensions are rapidly disappearing?

------
mooreds
I looked through the paper for the wealth level that qualifies you as a 1%er
or 10%er but didn't find anything. Anyone have any numbers for that?

~~~
brianwawok
It is usually by FAMILY income, so include both earners in a two income family

[https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-
to...](https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to-be-in-the-
top-1percent-in-every-us-state.html)

> To be among the top 1 percent of U.S. earners, a family needs an income of
> $421,926

For top 10%, you have $178,793.00 per

[https://dqydj.com/household-income-percentile-
calculator/](https://dqydj.com/household-income-percentile-calculator/)

~~~
bryanlarsen
That's income, not wealth. Big difference. @casey_junk found the wealth
numbers:
([https://news.ycombinator.com/item?id=20051782](https://news.ycombinator.com/item?id=20051782))

> Just to put some numbers on it 2017 you'd need a net worth of about 1.1
> million dollars to be in the top 10%.

> [https://dqydj.com/net-worth-brackets-wealth-brackets-one-
> per...](https://dqydj.com/net-worth-brackets-wealth-brackets-one-per..).

~~~
brianwawok
Income is actually a lot more useful metric though. Most (much?) "wealth" for
those in the > 0 but < millions is "house equity in a hot market".

------
b_tterc_p
I’ve been thinking that an exponentially progressive estate tax setup could
help here.

------
idlewords
The better headline here is that 1% own a third of the wealth.

~~~
xtiansimon
Better than 2% own 90% in banana republics.

------
mensetmanusman
The interesting thing about today is that the rich don’t have access to better
technology than anyone else due to massive scale. Also, they have no leisure
time...

~~~
mikepurvis
I think it depends which rich you're talking about. Certainly some of them
seem to have plenty of time on their hands:
[https://www.instagram.com/rkoi/](https://www.instagram.com/rkoi/)

~~~
aaronarduino
I wonder how many of those kids rent cars, clothes, etc. to look rich. I mean
it is Instagram after all.

~~~
mikepurvis
Probably some, but the point is just that there's a difference between the
working rich and the idle rich. Obviously it's not a black and white thing,
but someone who becomes a millionaire after working their butt off for years
as an entrepreneur and selling their company is having a very different
experience of life from someone who inherits everything and whose only
experience of business is as a figurehead— there are lots of examples of this,
but current populist premier of Ontario Doug Ford is a good one. Jared and
Ivanka are probably in this bucket too, though perhaps to lesser degrees.

------
RickJWagner
According to this inflation-adjusted accounting, today's billionares aren't in
the same ballpark as the rich of yesteryear.

It's why 'The rich get richer, the poor get poorer' is an old expression, I
guess.

[https://www.celebritynetworth.com/articles/billionaire-
news/...](https://www.celebritynetworth.com/articles/billionaire-
news/25-richest-people-ever-lived-inflation-adjusted-2017/)

------
padobson
The article points out that record low interest rates have pushed easy money
into the hands of the already-wealthy, exacerbating wealth inequality.

I see that as only half the story. While 0% loans were filling the coffers of
Bank of America and Sallie Mae and Chase and Wells Fargo, those same banks
were turning around and loaning the money out for consumption at 25% or for
assets that rapidly depreciate like cars and TVs at 5-25%, or purchases of
questionable value like college tuition at more variable rates.

r > g is still something of an open question in my mind, but the economic
weaponization of debt and the inability of consumers to shield themselves from
its adverse effects seems to be the reason for the wealth gap and why the
increase in capital returns has payed better than overall economic growth,
effectively transfering the future wealth of the poor to the present assets of
the rich.

It could probably be solved in a generation with stricter regulations on
consumer lending and the conversion of social security into a mandatory 401k,
similar to Australia's "Super" program.

The fix for capitalism is to force everyone to be capitalists.

------
douglaswlance
Wow. The bottom 90% should find ways to contribute more.

~~~
mtgx
I'm not sure if sarcasm or not, but do you believe that what would be "fair"
would be for the bottom 90% to pay for 90% of the budget in taxes?

Maybe in an ideal world that _could be true_ , but it would also require for
the bottom 90% to get 90% of the total income received in an given year. As we
can see, that's nowhere near the case.

So of course the single digit percentage of the population that makes the
lion's share of total income also has to pay the lion's share in taxes.

~~~
douglaswlance
The bottom 90% should contribute 90% of the value to the world, instead
they're only contributing 30%; while the 10% most successful contributors
generate 70% of the value.

That means 90% of people are not contributing as much as they could to
society.

------
frgtpsswrdlame
Okay everyone agrees that absolute position matters -> less deprivation is
better. But I'm interested in HN's perspective on relative position. It seems
that there are people for who relative position shouldn't matter at all and
people for whom relative position matters quite a bit, why?

------
bfrog
When was the last time wealth accumulated so greatly in so few hands, the dark
ages? It would be really interesting to know what history can tell us about
what this potentially means for our future.

~~~
htk
Maybe it is the opposite of what you're implying. ex: The creation of value is
so high that the discrepancies increase, but everyone is reaping the benefits,
just in different proportions.

~~~
itsaidpens
Tell that to someone making 35K/year.

~~~
Consultant32452
Doesn't matter. If you could choose when to be born, but not know your race,
sex, gender, sexual preference, general health, or family income.... There is
no doubt it's better to be born in 2019 than 1919.

~~~
harimau777
It is a good thing that we treat minorities and the poor better than we did in
the past. However, that doesn't mean that the middle class are not worse off
than they were at that time.

~~~
Consultant32452
If you got to choose between being a middle class white man in 1919 or 2019,
2019 is obviously the better choice. Even ignoring impending ww2 and the dust
bowl for the 1919 case.

------
itsaidpens
I'm telling you - and I mean this completely without hyperbole, lower your
conspicuous consumption. Get rid of your luxury car, don't project your
wealth.

To be honest, if you live anywhere on the peninsula (looking at you Atherton)
and even areas of San Francisco - a reckoning is coming. Neighborhoods will
burn.

"There's a storm coming, Mr. Wayne. You and your friends better batten down
the hatches, because when it hits, you're all gonna wonder how you ever
thought you could live so large and leave so little for the rest of us."

~~~
paulryanrogers
Is this predicting or threatening violence? If so I don't see how that's
constructive.

~~~
itsaidpens
Predicting. And threatening.

