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12 staggering statistics about financial inequality in the U.S.

U.S. News & World Report

September 17, 2017, 6:30 AM

The old saying that the rich get richer is truer today than ever. In 2013, the wealthiest 10 percent of American families held 76 percent of all family wealth, according to August 2016 data from the Congressional Budget Office. Meanwhile, the bottom 90 percent of Americans own nearly 74 percent of private debt, according to a December 2014 paper from the National Bureau of Economic Research. For middle-income Americans, their primary sources of wealth are their homes, but many would be devastated by an unexpected financial emergency, according to a survey from Bankrate.

But these statistics are just a drop in the bucket when it comes to bad news about inequality. These facts about financial inequality might leave you steaming.

The top 1 percent of earners have more than tripled their salaries. Today, the ultra-wealthy earn on average $1.3 million a year, according to a research paper in the Washington Center for Equitable Growth from economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman. In the 1980s, it was $420,000. Meanwhile, the salaries for the bottom 50 percent of earners have been stagnant at $16,000 over the same time period, according to Piketty, Saez and Zucman. (Thinkstock)
Thinkstock
If you’re looking for help with investing and don’t know where to start, here are several major red flags to avoid when considering a financial advisor. (Thinkstock)
The top 1 percent have doubled their income share. Piketty, Saez and Zucman have also found that the ultra-wealthy control more of the income “pie.” In 1980 they received 10.7 percent of pre-tax national income. In 2014, it was 20.2 percent. The bottom 50 percent of earners have seen their share of the pie shrink — they took home 19.9 percent of pre-tax income in 1980, but only 12.5 percent in 2014. (Thinkstock)
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Achieving the “American Dream” is less likely for workers today. People born in the 1980s only have a 50 percent chance of earning more than their parents did, according to researchfrom the Equality of Opportunity Project, a research project at Brown University that focuses on income mobility. This is a huge change from people born in 1940, who had an approximately 92 percent chance of earning more than their parents earned. (Thinkstock)
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But Hucker’s Housing and Building Maintenance Bill would require a house identified as vacant be frequently inspected. (Thinkstock)
The middle class is shrinking. While the middle class is growing smaller, the lower and upper classes are growing larger — a crystal-clear depiction of growing financial inequality. The percentage of middle-income households shrunk in 203 different metropolitan areas, according to a Pew Research Center study. At the same time, the lower-income percentage grew in 160 metro areas, and the upper-income percentage grew in 172 metro areas. This follows other Pew research that found the middle class no longer makes up the majority of households in America, like it did in 1971. (Thinkstock)
Thinkstock
It’s never too early or late for women to be more focused and intentional about their money. (Thinkstock)
It will take women at least four decades to match men in pay. In 2015, the income gap between men and women stood at 20 percent, according to the American Association of University Women. Looking at wage data since 1960, it will take another 42 years for male and female wages to be equivalent. However, the gains women have made have slowed in recent years. It will take 135 years for female wages to equal male wages if the trend of the last 15 years holds steady. (Thinkstock)
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Three children (5-12 years) standing with parents and grandparents, portrait
Wealth inequality between white Americans and black Americans has grown. At the end of the Great Recession in 2010, the wealth of white households was 8.3 times that of black households, according to the Pew Research Center. In the years since then, however, white wealth has grown — three years later, in 2013, the wealth of white households was 12.9 times that of black households. (Thinkstock)
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Elderly woman checking her purse for cash
Millions of Americans live on $2 or less per day. In the U.S., 1.5 million households live on $2 a day, according to researchers Kathryn Edin and Luke Shaefer’s 2015 book “$2.00 a Day: Living on Almost Nothing in America.” This includes more than 3 million children. (Thinkstock)
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CDs are one way to save. (Thinkstock)
Many Americans will retire broke. Living paycheck to paycheck is a reality for many Americans. Less than half of Americans have more than $10,000 in their retirement accounts, and 34 percent have no retirement savings at all, a GOBankingRates survey found. (Thinkstock)
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Adjustable rate mortgages, which fell out of favor, are making a comeback. (Thinkstock)
Wealthy households are reaping wage-growth benefits. After the Great Recession, between 2009 and 2014, wealthy earners saw income growth while others didn’t. The top 1 percent of households saw 58 percent of total real income growth, according to research from Saez. The remaining 42 percent of income growth was divided between the remaining 99 percent of earners. (Thinkstock)
Thinkstock
CEO pay has increased almost 1,000 percent. Adjusted against inflation, CEO pay rose 997 percent between 1978 and 2014, according to the Economic Policy Institute. During the same time period, annual compensation for workers only rose 10.9 percent. The CEO-to-worker compensation ratio was 30-to-1 in 1978, compared to 303-to-1 in 2014. (Thinkstock)
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Know your finances. (Thinkstock)
Employers steal billions of dollars from low-wage employees yearly. Employees lose about $8 billion annually in the 10 most populated U.S. states due to minimum wage violations, according to the Economic Policy Institute. This works out to be about $3,300 per person per year, and forces many low-wage workers to turn to public assistance. (Thinkstock)
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Determining the best strategy for claiming your Social Security benefits can be even more complicated if you are divorced and single, divorced and remarried, or widowed. (Thinkstock)
The bottom third of U.S. earners won’t collect full Social Security benefits. Lower wages typically mean physically demanding jobs, leading to a higher rate of both physical and mental stress. Workers in the bottom third of income distribution tend to retire before reaching age 66, according to the Brookings Institution. When retiring early, they are forced to take reduced Social Security benefits, increasing economic inequality between themselves and those who can work longer and claim a larger benefit. (Thinkstock)
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(1/12)
If you’re looking for help with investing and don’t know where to start, here are several major red flags to avoid when considering a financial advisor. (Thinkstock)
But Hucker’s Housing and Building Maintenance Bill would require a house identified as vacant be frequently inspected. (Thinkstock)
It’s never too early or late for women to be more focused and intentional about their money. (Thinkstock)
Three children (5-12 years) standing with parents and grandparents, portrait
Elderly woman checking her purse for cash
CDs are one way to save. (Thinkstock)
Adjustable rate mortgages, which fell out of favor, are making a comeback. (Thinkstock)
Know your finances. (Thinkstock)
Determining the best strategy for claiming your Social Security benefits can be even more complicated if you are divorced and single, divorced and remarried, or widowed. (Thinkstock)

[See: Basic Money Lessons You (Probably) Missed in High School.]

[See: How to Live on $13,000 a Year.]

[See: 7 Deadly Money Sins to Avoid.]

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12 Staggering Statistics About Financial Inequality in the U.S. originally appeared on usnews.com

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