Tuesday, August 30, 2005
Poverty Rate and Wealth Divide in the United States
"U.S. Poverty rate rises" reads the headline of a report filed by Reuters on 8/30/05. "The percentage of the U.S. population living in poverty rose to 12.7 percent from 12.5 percent in 2003, as 1.1 million more people slipped into poverty last year".
The figures are based on data released by the Census Bureau, and reflect fourth consecutive annual increase.
Overall, there were 37 million people living in poverty, up 1.1 million people from 2003.
The Wealth Divide
On the other side of the picture is the tremendous disparity between the rich and poor. In the Unites States the richest 1% of households own 38% of all wealth.
The interview with Edward Woff that appeared in the Multinational Monitor (see below) clearly describes the inequality.
"MM: What portion of the wealth is owned by the upper groups?
Wolff: The top 5 percent own more than half of all wealth.
In 1998, they owned 59 percent of all wealth. Or to put it another way, the top 5 percent had more wealth than the remaining 95 percent of the population, collectively.
The top 20 percent owns over 80 percent of all wealth. In 1998, it owned 83 percent of all wealth.
This is a very concentrated distribution.
MM: Where does that leave the bottom tiers?
Wolff: The bottom 20 percent basically have zero wealth. They either have no assets, or their debt equals or exceeds their assets. The bottom 20 percent has typically accumulated no savings.
A household in the middle — the median household — has wealth of about $62,000. $62,000 is not insignificant, but if you consider that the top 1 percent of households’ average wealth is $12.5 million, you can see what a difference there is in the distribution."