Speed Reads

Mind the gap

Chart: America's top 0.1 percent now have as much wealth as the bottom 90 percent

Chart: America's top 0.1 percent now have as much wealth as the bottom 90 percent

When people talk about the rise of income inequality, this is what they mean:

That chart, from The Economist, is based on data from a recent working paper by U.C. Berkeley economist Emmanuel Saez and Gabriel Zucman at the London School of Economics, published by the National Bureau of Economic Research. The Economist also has a good writeup of the report, which bolsters the findings from Thomas Piketty's bestselling Capital in the Twenty-First Century.

As the chart above shows, according to Saez and Zucman's findings, the top 0.1 percent of U.S. households — 160,000 families, worth an average of $73 million — now holds 22 percent of America's wealth, for the first time since 1929. The real eye-opener, though, is the top 0.01 percent — 16,000 families, worth an average of $371 million, including both the Mark Zuckerbergs and Paris Hiltons of America — own 11.2 percent of total wealth, tying 1916 as the highest percentage on record.

The super-wealthy hit (still-comfortable) bottom in 1978, the economists found, and have risen steadily since; the bottom 90 percent peaked and started their long decline in 1986. Differences in wealth generation is part of the equation — the income of the top 1 percent rose 3.4 percent a year from 1986 to 2012, versus 0.7 percent for the bottom 90 percent — but Saez and Zucman say the biggest cause of the declining middle class is rising debt.

In any case, great news for fans of the Roaring Twenties. Check out the interactive graph at The Economist.