How has wealth distribution in the US changed over time? (2024)

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How has wealth distribution in the US changed over time? ›

In 2021, the top 10 percent of Americans held nearly 70 percent of U.S. wealth, up from about 61 percent at the end of 1989. The share held by the next 40 percent fell correspondingly over that period. The bottom 50 percent (roughly sixty-three million families) owned about 2.5 percent of wealth in 2021.

The highest-earning 1% of Americans drove this growth: at the end of 2022, their share of the country's wealth grew to 26% from 17% in 1990 — nine percentage points. Across those 32 years, the rest of the top quintile saw their share of wealth grow to 45% from 44% — a one percentage point gain.

The ratio of the 90th- to 10th-percentile (inequality between the top and bottom of the income distribution) decreased from 13.53 in 2021 to 12.63 in 2022. That means income at the top of the income distribution was 12.63 times higher than income at the bottom, a 6.7% decrease from 2021.

Wealth is distributed in a highly unequal fashion, with the wealthiest 1 percent of families in the United States holding about 40 percent of all wealth and the bottom 90 percent of families holding less than one-quarter of all wealth. 2 (See Figure 1.) Notably, 25 percent of families have less than $10,000 in wealth.

During the 1920s, there was a pronounced shift in wealth and income toward the very rich. Between 1919 and 1929, the share of income received by the wealthiest one percent of Americans rose from 12 percent to 19 percent, while the share received by the richest five percent jumped from 24 percent to 34 percent.

In the United States, the share of income among the middle two-fifths of income earners has remained stable, while the share in the lowest fifth has fallen and the highest fifth has increased, since the 1970s. the share of income among the lower four-fifths of income earners has decreased since the 1970s.

Two other common types of governmental redistribution of income are subsidies and vouchers (such as food stamps or Section-8 housing vouchers). These transfer payment programs are funded through general taxation, but benefit the poor or influential special interest groups and corporations.

You need more money than ever to enter the ranks of the top 1% of the richest Americans. To join the club of the wealthiest citizens in the U.S., you'll need at least $5.8 million, up about 15% up from $5.1 million one year ago, according to global real estate company Knight Frank's 2024 Wealth Report.

Since the early 1960s, the rise in income inequality as measured by the 90/10 ratio (29 percent) has significantly exceeded the rise in consumption inequality (7 percent).

Wealth inequality within countries is typically much higher than income inequality. It has followed a rising trend across countries since around 1980, similar to income inequality. Higher wealth inequality feeds higher future income inequality through capital income and inheritance.

What is the distribution of wealth in the US by age? ›

As of 2019, individuals under 40 years old held just 4.9 percent of total U.S. wealth despite comprising 37 percent of the adult population. Conversely, individuals over age 54 made up a similar share of the population and held 71.6 percent of total wealth.

Excessive inequality can erode social cohesion, lead to political polarization, and lower economic growth.

Extreme Wealth Reflects and Perpetuates Racial Inequality

White, non-Hispanic families own 86 percent of the total wealth in the United States, while Black, non-Hispanic families own just 3 percent, our analysis of data from the SCF indicates.

Over the same period, the share held by upper-income households increased from 29% to 48%. The share flowing to lower-income households inched down from 10% in 1970 to 9% in 2018. These trends in income reflect the growth in economic inequality overall in the U.S. in the decades since 1980.

The uneven distribution of wealth in the 1920's existed on many levels. Money was distributed disparately between the rich and the middle- class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy.

The prosperity of the 1920s led to new patterns of consumption, or purchasing consumer goods like radios, cars, vacuums, beauty products or clothing. The expansion of credit in the 1920s allowed for the sale of more consumer goods and put automobiles within reach of average Americans.

As a result of the Industrial Revolution, economies transformed and affected all classes of people. First, the rich got richer. The rich who owned businesses became even richer. Middle class factory owners were able to move into the upper class.

At the bottom, the 10th percentile of the wealth distribution is $1 (in 2022 dollars), meaning that one in 10 households had virtually no wealth. In the middle, median household wealth is $162,350. The top 10 percent of households had $1,559,240 or more in wealth, and the top 1 percent had at least $11,640,000.

Societies with pronounced economic inequality suffer from lower long-term GDP growth rates, higher crime rates, poorer public health, increased political inequality, and lower average education levels.

According to a study done by the Brookings Institute, in 1929 the top 0.1% of Americans had a combined income equal to the bottom 42%. That same top 0.1% of Americans in 1929 controlled 34% of all savings, while 80% of Americans had no savings at all.