Earlier this year, the Federal Reserve asserted that median family wealth had plummeted almost 40 percent between 2007 and 2010. A recently released study by a New York University economist found that was scratching the surface, finding median family wealth is at the lowest point in 43 years.
Median family wealth was higher in 1960s
Class isn’t supposed to exist in America, though denying that it clearly does is impossible given the mountain of evidence confirming it does, many times over. One measure is family wealth, the median amount of wealth in assets held by the typical American family.
According to Daily Finance, a study by Dr. Edward N. Wolff, an economist and professor at New York University, found that median family wealth, $57,000 in 2010 dollars, is the lowest it has been since 1969.
Much of the damage occurred between 1983 and 2010, when the number of families with $10,000 in assets or less grew from 29.7 percent of the population to 37.1 percent. The top 1 percent of households increased holdings by 71 percent in that time. The top 10 percent of households went from holding 68.2 percent of the wealth in the nation to 76.7 percent.
Not the first to find that
Wolff wasn’t the only one to find median family wealth has plummeted lately. Earlier this year, according to CNN, the Federal Reserve Survey of Consumer Finances similarly found that average household net work fell from $126,400 in 2007 to $77,300. That’s nearly a $50,000 drop in three years, which practically put 2010 households on par with household net worth from 1992, practically erasing any gains in that time.
Younger middle class families, according to the Los Angeles Times, were hit hardest. Median wealth in households headed by 35- to 44-year-olds fell 54 percent to $42,100 in that time period.
Much of it had to do with plummeting housing values and stock holdings; the average homeowner had a net worth of $246,000 in 2007, which dropped to $174,500 by 2010, more than $70,000 less than three years previously. As a result, a number of people also went underwater with their loans.
Income also fell
At the same time, the Fed survey found income fell along with median family wealth. Median pre-tax income dipped from $49,600 in 2007 to $45,800 in 2010, a 7.7 percent decrease. The worst hit was absorbed by those under 35 years of age and the college-educated. The 35-and-under set saw incomes declined 10 percent to $35,100.
Median income among college graduates dipped 10.3 percent, from $47,800 in 2007 to $42,900 and for households headed by a college graduate, median income declined from $81,900 to $73,800, around 10 percent less.