Thursday, December 01, 2011

1% or 99%?

Are you wondering (quietly) whether you might in fact be a member of the 1 percent rather than the 99 percent? Here is your answer: the net worth of the wealthiest 1 percent of households is $6,917,000.

That number comes from an analysis of the 2009 Survey of Consumer Finances by Arthur B. Kennickell, assistant director of the Federal Reserve Board's Division of Research and Statistics. Kennickell is the maestro of the Survey of Consumer Finances. His latest study examines changes in the distribution of household wealth between 2007 and 2009 (when, in an unprecedented effort, the Federal Reserve Board reinterviewed the triennial SCF panel of 2007 to determine the impact of the Great Recession on wealth). The Survey of Consumer Finances is the only source of nationally representative data on household wealth. By oversampling wealthy households, the survey also provides the best estimate of how much it takes to be rich.

Apparently, it takes a lot more than once did. The net worth of the rich (in 2009 dollars) has been growing steadily since 1962, when it required only $1.6 million to be in the 1 percent. The figure peaked at $9.0 million in 2007 before falling to the $6.9 million of 2009. As for the other 99 percent, median household net worth climbed from $46,100 in 1962 to a peak of $125,400 in 2007, then fell to $96,000 in 2009.

Source: Federal Reserve Board, Tossed and Turned: Wealth Dynamics of U.S. Households 2007-2009, Arthur B. Kennickell, Finance and Economics Discussion Series, 2011-51

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