The Hudson Institute, a Washington D.C.-based research organization, on Tuesday put out a report that paints a dreary picture of the economic condition of middle class families.
The report, The Distribution of Wealth in America, 1983-2013, the Federal Reserve Board's in-depth triennial Survey of Consumer Finances, the report analyzes trends in the changing composition and distribution of American wealth from 1982 through 2013 (the full range of available survey data). It was produced by John C. Weicher, Director of Hudson Institute's Center for Housing and Financial Markets. Weicher formerly served as Assistant Secretary for Housing and Federal Housing Commissioner at the U.S. Department of Housing and Urban Development (HUD), and as chief economist at both HUD and the Office of Management and Budget.
Major findings in the report include:
- "Families in the middle" – with a net worth between the 45th and 55th percentile of the wealth distribution – saw their wealth drop 40% in a three-year period, while their incomes dropped 15%, making saving and replenishing harder. The richest decile of Americans faced an average drop in wealth of 11%.
- Household wealth in the U.S. increased rapidly between 1983 and 2007, but the great recession caused median household wealth to drop to 1983 levels, with no improvement during a weak recovery.
- Families in the middle lost nearly half of the equity in their home between 2007-2010. This is the largest component of wealth for the middle class.
- Three-quarters of the total net worth of all U.S. households is owned by the richest decile of Americans, the largest share recorded in over three decades.
- The 2008 financial recession resulted in the largest decline in consumer confidence about financial well-being within a 50-year span of relevant polls.
- The economic ground gained by the middle class during periods of economic expansion was completely lost during the Great Recession and the weak recovery.