Mitch Berg clued me in to this article here; more or less, median net worth (assets-liabilities) of U.S. families has dropped by 40% in the past few years. Now with housing dropping precipitously, and Americans doing most things with debt instead of with assets, this is not terribly surprising, but what surprised me is that median net worth of families is only $77,000 these days. It's along the same lines as when a friend of mine claimed--and I don't know whether it was true--that Bill Gates' net worth of $50 billion at the time was greater than the net worth of the 50 million poorest Americans, indicating that the bottom 50 million Americans have an average net worth of $1000 or less. Ouch!
Back to Mitch's source, if we consider that hypothetically the median family would be in their forties or fifties, averaging out whether they are married or not, this surprises me. Aggregate savings for "1.5" people in the workforce over approximately 25 years--40 man-years more or less--is about $2000 per year, or $6/day--and that not even counting the appreciation of investments. To put it in everyday terms, aggregate daily savings among "median" Americans are similar to the cost of a trip to Caribou or Starbucks. Even the previous number--$125,000 per family--represents savings of only about $3000 per year, so the problem isn't entirely (or even primarily) the loss of housing equity.
My best guess is that it's the things we "can't do without." For some, it might be eating out instead of a brown bag meal. For others, it's cable TV, or a trip to Starbucks each day, or a new fashionable wardrobe each season, or the trip to the gaming hall. And if we take a look at the spending habits of the middle class and poor, these expenditures are what we see among the "median."
So if you're concerned about great wealth gaps--and count me in that category--it's probably time to admit that #1 on the Pareto is not rich people rigging the game. It's the middle class and poor--people like me--who "can't do without" their daily pleasures.
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