The first years of the U.S. economy's recovery from the Great Recession yielded strong gains in total wealth for the richest Americans, while every other income block experienced a decline in total wealth, according to a report released Tuesday from the Pew Research Center.
The upper 7 percent of U.S. households watched their mean net worth grow by 28 percent, to $3,173,895, from 2009 to 2011, according to a Pew analysis of data from both years. Over the same period, the mean net worth of the bottom 93 percent of U.S. households dropped 4 percent, to $133,817.
That drastically increased the already stark divide between the rich and everyone else. The mean net worth of the wealthiest Americans in 2011 was 24 times greater than that of the rest of the country, up from roughly 18 times greater in 2009, the report found.
Richard Fry, senior research associate at the Pew Research Center, explains the growing divide by pointing to two things: the stock market rally during the first two years of the economic recovery, which benefited the nation’s most affluent households, and the lack of recovery in the housing market, which hurt poorer Americans, who more commonly have a heavy percentage of their net worth tied to their home.
“The income recovery thus far for a wide swath of U.S households has not existed,” Fry told HuffPost. “One of the reasons is because most Americans households own a home [and] very few own stocks."
Yet things should improve for the majority of Americans if signs of a housing recovery prove fruitful, Fry said. Federal Reserve Chairman Ben Bernanke’s decision to keep short-term interest rates low should also play in the favor of a majority of Americans, he added.
The Pew report hints at the continuation of a long-time trend toward greater income inequality in the U.S. Between 1966 and 2011, incomes for the bottom 90 percent of Americans only rose by an average of $59, according to analysis by Pulitzer Prize-winning journalist David Cay Johnston for Tax Analysts. During the same period, the average income for the top 10 percent grew by $116,071.