The New American Economy: A Rising Tide that Lifts Only Yachts

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On Top of the WorldIn all market economies, wealth ownership is highly concentrated, but the UnitedStates leads the pack by a significant margin. The wealthiest 20 percent of householdsin the United States own nearly four-fifths of household wealth (see Figure 4).Figure 4. Share of Total Wealth Owned by Wealthiest20 Percent in Four Countries, Early 1990sCanadaWest GermanyAustraliaUSA60 65 70 75 80Percent of total wealth ownedNote: These data are for various years in the early 1990s and are for households with heads agedtwenty-five to sixty-four.Source: Richard Hauser and Holger Stein, Inequality in the Distribution of Personal Wealth in Germany1973–1998, Levy Institute Working Paper 398, November 2003, availible online at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=488223.
With respect to income inequality, research using data from the Luxembourg IncomeStudy reveals that, while a family in the United States with the median income is well offby international standards, low-income families here have slightly less purchasing powerthan the poor in mostother advanced economies.Figure 5 shows themean income of those inthe top 10 percent of theincome distribution, thosein the bottom 10 percent,and the median incomefor six European countries,Canada, and the UnitedStates (all income levelsare presented as a percentof the U.S. median incomeso that they can be easilycompared). In Sweden, thecountry in the figure withthe least income disparity,the high-income segmentof the population is onlya little better off than theU.S. median, yet the poorin Sweden have higherpurchasing power than thepoor in the United States.Income as percentage of U.S. median income250200150100500SwedenFigure 5. Income at Various Points in the Distributionin the 1990sHigh incomeMedian incomeLow incomeNetherlandsNorwayGermanyFranceUnited KingdomCanadaUnited StatesSource: Timothy M. Smeeding and Lee Rainwater, Comparing Living StandardsAcross Nations: Real Incomes at the Top, the Bottom, and the Middle, LuxembourgIncome Study, Working Paper 266, February 2002, available online at http://www.sprc.unsw.edu.au/dp/DP120.pdf.
Page 3 and 4: The Majority of Americans Grow Old
Page 5: Edward Wolff of New York University
Page 9 and 10: Rather than work against the growin
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The New American Economy: A Rising Tide that Lifts Only Yachts

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