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The Top 1% Own 32.1% of Total Wealth, Bottom 50% Own 2.5%

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42 comments on The Top 1% Own 32.1% of Total Wealth, Bottom 50% Own 2.5%

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Data Source: Board of Governors of the Federal Reserve System (Fed), Chart by Mish

This data series compiled by the Fed started in the third quarter of 1989. The most recent data is from the third quarter of 2021.

If you have not seen charts of this series before, the numbers may seem shocking. 

1989 Q3 vs 2021 Q3 Percentages

  • Top 1% Then 23.6%, Now 32.1%
  • 90th to 99th Percentile Then 37.3%, Now 37.5%
  • 50th to 90th Percentile Then 35.6%, Now 27.9%
  • Bottom 50% Then 3.7%, Now 2.5%

Gains or Losses Since 1989

  • Top 1%: +8.5 Percentage Points
  • 90th to 99th Percentile: +0.2 Percentage Points
  • 50th to 90th Percentile: -7.7 Percentage Points
  • Bottom 50%: -1.2 Percentage Points

Key Points

  1. The bottom never had much to lose but they managed to lose a bit anyway. 
  2. The top keep padding their wealth but remain the most impacted by recessions.
  3. The middle class is shrinking. 

Credit and Blame

Many people will blame the wealthy. But the actual culprit is the Fed.

The bottom 50% sure don’t gain from bubbles. 

Those with assets are the beneficiaries. And when the Fed steps on the gas, look at the far right of the chart to see what happens.

Beneficiary of Inflation

Inflation benefits those with first access to money and that’s the banks and the already wealthy.

The poor who spend every penny and them some on food and shelter get hammered by inflation. 

Meanwhile, the middle class keeps shrinking. 

CPI Jumps Most in 40 Years

The Fed tried for a decade to increase inflation. The Fed even wanted to “make up” for lack of previous inflation.

But the CPI rose another 0.6% in January, at a year-over-year clip of 7.5%. The CPI is at the highest pace in 40 years.

For discussion, please see CPI Jumps Most Since February 1982, Up at Least 0.5% 9 Out of Eleven Months

The Fed finally succeeded and then some at producing inflation. Now doesn’t know what to do about it. 

But should the banks get in trouble again, the Fed will be right there again to bail them out just as it did in 2000 in the dotcom bust and again in the 2007-2009 housing crash.

This post originated at MishTalk.Com.

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Mike Shedlock

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42 Comments
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Oldest Most Voted
michiganmoon
michiganmoon
4 years ago
This doesn’t apply to most people in the bottom half, but I have a friend who a few years back invited me over to his party where he was serving craft beer, showed me pictures on his new iPhone of his trip to Jamaica, and he has nice vehicles. 
Later on at this same party he went on a long-winded rant about how it is “impossible” for middle class people to save and invest, only the rich can do that.
Wealth creation is in good part behavioral in my opinion.
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Jackula
Jackula
4 years ago
Excellent post Mish…
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MumbaiKar
MumbaiKar
4 years ago
Maybe our Fed officers also have some mysterious gurus 🙂 
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Call_Me
Call_Me
4 years ago
It shouldn’t be a surprise to see extreme stratification in the net worth of a population, as it has been well-documented on this site that having early access to money affords one the greatest benefit.  This isn’t Lake Wobegon, where everyone is above average.  In earlier times when the imbalance grew too extreme there was societal reset, but as time goes on the creature comforts (indoor plumbing, easy access to food, electricity, et cetera) make it increasingly difficult for the commoners to throw it all away and revolt.
Call_Me_Al
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Webej
Webej
4 years ago
The causes are manifold and extent to apolitical ones such as technology.
However none of these things are forces of nature, and it has become obvious that the leadership class has been completely co-opted.
Which is why nobody has any confidence in the future course.
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TCW
TCW
4 years ago
If everything’s in a bubble and you believe it’s going to pop, won’t the 1% be the ones with most to lose and the figures will return to what they were 30 years ago?  Is this all just temporary?
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StukiMoi
StukiMoi
4 years ago
Reply to  TCW
“If everything’s in a bubble and you believe it’s going to pop, won’t the 1% be the ones with most to lose and the figures will return to what they were 30 years ago?  Is this all just temporary?”
In a market economy, that’s exactly what happens. Which bothered idle and connected leeches to no end.
Hence, The Fed was created. Explicitly, and only,  to prevent exactly that from happening.
Such that now; when there is a downturn which would inconvenience the idiots who paid a million dollars for a $50K decaying shack,; The Fed will simply rob the less connected, (hence in a pure kleptocracy less wealthy), even harder. Ensuring that the idiots get to continue amassing wealth, despite being nothing but idiots. Just ones closer to The Fed than most members of the productive classes.
That institutionalized robbery and wealth redistribution for the benefit of the connected, is what is referred to as “The System.” Ensuring that this robbery remains; no matter market forces to the contrary; always the ultimate and only determinant in how effectively all wealth is allocated; is what “preventing The System from collapsing” refers to.
Furthermore, “The System” refers to nothing whatsoever other than this theft. There is no positive, nor beneficial, side to it. No pros and cons. Just lke any other crass robbery, there are only, 100% cons. No pros. Ever. No economic benefit whatsoever derives from it, for anyone not on The Fed’s shortlist of crass theft beneficiaries. Everyone else is losing out as a result of The System not collapsing. Absolutely noone who is not a direct theft beneficiary, would suffer one iota if Lehman, along with every other US and international bank went completely, 100%, out of business by this afternoon. Nor if everyone who paid a million for a shack which costs $50,000 to build, lost it in BK, along with the debt attached to it. Noone. Instead, the entirety of “The System”, along with every institution, and every individual, supporting it; is doing nothing whatsoever but cheering for something which is 100%, purely destructive theft without a single redeeming feature whatsoever. Some, heck many, are unfortunately too stupid, illiterate and indoctrinated to realize even something so trivially obvious.
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vanderlyn
vanderlyn
4 years ago
great article as usual.    i’d just like to add,  the fed is not some amorphous entity.    it has owners that are human beings after corporate banking………kimona’s are bared.   as the military industrial complex……….and other empire apparatuses.     
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Felix_Mish
Felix_Mish
4 years ago
Well, there are mainly two “rich people”s out there:
1) Those who have (or, if you are young, earn) enough more than you that you notice. That is, the “rich” that those who are activated by envy focus on.
2) Some old people. That is, the “rich” that those who are activated by statistics focus on.
The US has a bit of an old-people bubble right now, so their croaking will help pull the Gini coefficient down in the near future.
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wmjack50
wmjack50
4 years ago
Prof. Walter Williams : What is money? Nothing more than “certificates of performance” that prove that the bearer has served his fellowman and may use these C.O.P.s When making a claim against his fellowman’s property for the bearer’s use. 
Rich people usually serve their fellowman While the poor only serve themselves. This maybe multi generational.
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Business Man
Business Man
4 years ago
Reply to  wmjack50
Thank you.  People confuse money with wealth.  They are not the same thing.
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Sunriver
Sunriver
4 years ago
Plutonomy axiom #1: Those who have assets/money, should continue to maintain their assets/money.
Plutonomy axiom #2: Refer to axiom #1.
Plutonomy Mission Statement:
Through the guise of technological/infrastructure advancements, the serfs will be complacent to the point that civil unrest does not occur.
1929 and 2008 were two blows to the bow of the Plutonomy with the later, exposing the cards in the hand of the Plutonomy to keep order.  I’m young enough (56) to most likely see how this will all play out. The unraveling of the debt will most likely spawn civil unrest and possibly the end of ‘The Roman Empire Version II’.
Get your Soma ready!
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Casual_Observer2020
Casual_Observer2020
4 years ago
More people are higher income levels are getting pushed down into the middle class. This will be the untold story of the rest of this decade. If you have kids, this accelerates quickly. At some point, there will only be the owners and everyone else. 
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Roadrunner12
Roadrunner12
4 years ago
“Many people will blame the wealthy. But the actual culprit is the Fed.”
Im a Canadian and the reality is our central bank just parrots the Fed. No use even following the Canadian Central bank because the reality is the Fed dictates what our central bank will do.
I work with roughly a 100 people at work and if I took a poll, I bet I would get
97% blame government
2% (myself included blame Fed & govt)
1% blames George Soros and Bill Gates.
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Maximus_Minimus
Maximus_Minimus
4 years ago
Reply to  Roadrunner12
97% cannot put a sheet of paper between government and the central bank,
Liberalization of financial flows ensured there is no safe harbour, bubbles and crashes happen almost in sync.
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Dr_Novaxx
Dr_Novaxx
4 years ago
Okay Mish, agreed.  This is destabilizing and disgraceful situation – and caused by the Fed.  How do we fix it?
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Captain Ahab
Captain Ahab
4 years ago
Reply to  Dr_Novaxx
Easy. A 100% inheritance tax. My kids did not earn any of my wealth; and I did not earn any of my parents’ wealth.
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Eddie_T
Eddie_T
4 years ago
Calling out the top 1% is aiming too low. The top 1% includes a lot of upper middle class people who made good investments with their earned income, including people who comment on this forum every day.
The problem is more apparent if you realize that the top 0.1%  (that’s the top ten percent of the 1%), less than 200K families in this country of 329 million people, own somewhere between 15-20% of the wealth, depending on who you ask. That is fairly obscene.
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Captain Ahab
Captain Ahab
4 years ago
Thank you for posting this. It confirms my observations, and long-held opinion about the Fed.
What many people miss is that the Fed, by lowering real interest rates into sub-zero territory, forced the bottom 50% into miss-priced risky assets, with no effective way to hedge. Any market decline will be particularly hard on them.
That said, wealth accumulation is part of human evolution–survival of the fittest continues, albeit without a level playing field.
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RonJ
RonJ
4 years ago
Reply to  Captain Ahab
“That said, wealth accumulation is part of human evolution–survival of
the fittest continues, albeit without a level playing field.”
The … That Built America. A series of series on the rise of various industries and the companies that came to dominate them and the people behind their success or failure. It could be pretty messy. Driven people, trying to one up each other with a new innovation that will dominate the marketplace. None seek a level playing field. They seek advantage for themselves.
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Maximus_Minimus
Maximus_Minimus
4 years ago
Reply to  Captain Ahab
You started out well, but then you went off topic. The evolution didn’t invision artificial hoops. Like the bunch of cretins bankrupting the financial system, financial repression, money printing out the wazoo. Put plainly, if you put money in the bank, you expect interest over inflation.
End the cetral banking cabal.
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StukiMoi
StukiMoi
4 years ago
Reply to  Captain Ahab
“That said, wealth accumulation is part of human evolution–survival of the fittest continues…”
Evolution becomes devolution, once “survival of the fittest” is abandoned, in favor of  “survival of the ones closest to The Fed and nothing but”
That devolution is why even sworn communists are better than “us” at almost everything, other than living off of wealth stolen from others, by now.
And why freer peoples don’t even need to put on boots instead of sandals, in order to kick us around like nothing more than annoying, but ultimately irrelevant, ragdolls.
“The fittest” outcompete communists. And win the wars they fight. Pretty much per definition of “fittest.” Then, of course, idiots producing nothing, while running aorund stupid enough to believe they are being “smart” when they pay a million for a 50K shack; are also pretty much the definition of the exact opposite of “fittest.”
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Bam_Man
Bam_Man
4 years ago
That 2.5% that the bottom half owns is apparently still too much.
“You will own nothing and be happy.”
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Doug78
Doug78
4 years ago
Reply to  Bam_Man
Everyone knows that the homeless are the happiest of people.
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Bam_Man
Bam_Man
4 years ago
Reply to  Doug78
Especially when they are drunk or high (most of the time).
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whirlaway
whirlaway
4 years ago
Well, if the incomes of the bottom 20% or 50% or 90% had gone up as much as that of the top 1%, maybe they would have at least some wealth, huh?
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dbannist
dbannist
4 years ago
I don’t think it’s all that wrong for the rich to get richer, personally. 
The wealthiest people are able to keep getting wealthier when the population increases.  There are more people to gather wealth from.  As population rises there will always be a few at the top of the pyramid that gather resources from the rest.  For example, if there are two people in the world and that’s it, the richer one will never be able to construct 100 million dollar yachts on the back of the other one.  It takes a sizeable population for that to happen.  There are simply MORE people today than in 1980, so the richer are richer today.  
Are the poor getting poorer in the USA?  Most definitely NOT!  The poor today are far wealthier than they were in the 1980’s.  Yes, the bottom 50% don’t own anything, but that’s always been true.  There are simply more of them today and they spend everything they own, providing wealth to the top 1%.
I personally don’t have a problem with that, it’s a simply reality of math and population.  I do, of course, have a problem with the Fed blowing bubbles.  A great deal of the wealth of the 1% is a mirage due to the everything bubble.  
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TexasTim65
TexasTim65
4 years ago
Reply to  dbannist
Well stated.
The other thing you didn’t mention is that as population increases, we get more people in the bottom half (poor people). Those people still need food, shelter, clothing and since we live in a finite world, everyone’s share (rich, poor etc) gets slightly less due to the increase of population. For the very rich, a slightly smaller share doesn’t mean much. But for middle class people a slightly smaller share may well be enough to push them down into a lower class category.
It’s also not clear the the middle class is a sustainable class of people. It never existed prior to the early 20th century and even then, it only existed in a few 1st world countries. It could very well be an anomaly that is ultimately doomed to extinction due to finite world + infinitely increasing population.
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yooj
yooj
4 years ago
Reply to  TexasTim65
The opposite is true. More people supports  growth means more wealth and wealth  equality. As the population increases,  you run out of  sons and daughters of the rich to be be bankers, doctors, engineers and lawyers. Harvard doesn’t grow as fast as the population. Non-Harvard grads have a better chance the bigger the population.   
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TexasTim65
TexasTim65
4 years ago
Reply to  yooj
If this were true then why wouldn’t we be inviting in hundreds of millions of immigrants to make us wealthier? And why isn’t China and India the richest nations on earth?
The reason is because resources are finite. If you double the population it means there is 50% less land, 50% less oil/wood/metal, 50% less food etc for everyone and of course we get 100% more pollution, 100% more carbon use and so on.
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yooj
yooj
4 years ago
Reply to  TexasTim65
Actually we DO need mass immigration to makes us wealthier. Look at countries that curtail immigration, such as Japan. Stagnation and low growth.  China is becoming wealthier largely because of its huge population — but now is trying to grow its population.  It constrained population when it was poor, but recognizes that it must increase population to grow wealthier.  A large population, however, although necessary is not sufficient, which is why India lags. Need free market capitalism, and various liberal institutions, too. 
We suffer less pollution and use less resources with wealth and bigness.  E.g., my iPhone uses a tiny fraction of materials compared to what it replaces, a camera, VCR, four telephones with copper landlines, a calculator or three, an answering machine, video conferencing to replace some travel, a record player and CDs, records, paper maps, etc.  Big, populous countries innovate and produce iPhones – and become efficient.
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yooj
yooj
4 years ago
Reply to  yooj
Newspaper, and printed mail, the yellow pages…  don’t worry about resources… ingenuity frees us from  material constraints. 
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StukiMoi
StukiMoi
4 years ago
Reply to  dbannist
“For example, if there are two people in the world and that’s it, the richer one will never be able to construct 100 million dollar yachts on the back of the other one.”
Do you also believe it is easier to score 30% of the points in a game against one competitor, than against 2 million of them?
And that it is easier to run around protecting your million acre ranch/country’s fence line against a million marauding Huns, than against one of them?
There are reasons one of the most fundamental laws of economics, is Diminishing Returns: It’s rather easy, for near anyone, to pick, and protect until supper time, enough apples to get by. But to do the same with a thousand apples…?
Sure, if you are unusually clever, you can construct an apple picking machine. And a hardened shed with locked doors. Or perhaps offer someone more of them than he could pick himself, by guarding your stash. But how many of those guys, cold you oversee, before some of them then decide to use their position to fill their own shed with apples taken from yours…. And so forth and so forth. The marginal cost of adding, and maintaining,  more, increases.
While, at the same time, the additional benefit from another apple, or dollar, once you already have plenty, keeps declining. The two combining to severely limit how great a share of resources any one person ends up amassing.
There is only one possible reason why things may appear to be different: Costs are being obscured. Aka passed on to others: Someone else is being forced to contribute the resources, aka to pay, to make up for the ever increasing marginal cost required for someone to continue to both obtain, and maintain, control of ever greater resources.
Of course, thus enlightened, one doesn’t have to dig too deep to find the major pathways which facilitates this forcing-of-others-to-pay: Massive, systemic, wealth redistribution; by way of debasement, differential access to lawmakers etc.: From those further back on the diminishing returns curve, to those beating their heads against the curve much further out.
Left to their own free devices, massive wealth inequalities are just not very sustainable for much time. They’re not only darned near impossibly costly to obtain temporarily in the first place, but are then just as impossible to maintain. The resources required to do so, are just completely impossible to continually muster for any given individual. Again, unless someone else is forced to do the resource contribution. IOW, they’re simply not sustainable in anything resembling a free society.
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Eddie_T
Eddie_T
4 years ago
Top “earners” are upper middle class people who have high earned income, and they have a glass ceiling called the income tax.
The people at the top accrue almost all their money tax free in the form of assets held for long term capital gains. This is an important distinction to understand.
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whirlaway
whirlaway
4 years ago
Reply to  Eddie_T
The really really rich have been successful in getting the top 10% earners to fear and hate the bottom 90% of the earners.
As the saying goes: Rich people pay Fox/MSNBC/CNN people to get middle-class people to hate poor people.  
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Eddie_T
Eddie_T
4 years ago
Reply to  whirlaway
I’m glad this is perhaps becoming a little better understood. The billionaires in this country definitely do prey on the mere millionaires.
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whirlaway
whirlaway
4 years ago
Reply to  Eddie_T
Well, the “mere millionaires” have to understand it, more than anyone else.
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1-shot
1-shot
4 years ago
Question … do these changes really make any difference?
To me they just show that top earners will always earn more and own more than the rest. 1, 2, 5, 8% more or less – who cares? 
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Zardoz
Zardoz
4 years ago
Reply to  1-shot
It’s all fun and games until they buy control of the government.
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shamrock
shamrock
4 years ago
I always wonder about this “percent of wealth” statistic because the bottom X percent have 0 or negative wealth, so of course it looks bad.  If there are 1,000 people and 999 of them have 0, then the 1 person with positive net wealth has 100%.  Maybe it doesn’t matter just seems off.
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Robbyrob
Robbyrob
4 years ago
The ocean is turning into a graveyard, but we won’t realize it until we see it
Scuba diving a powerful tool to raise climate awareness
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Jmurr
Jmurr
4 years ago
Reply to  Robbyrob
So true. The world of Soylent Green is our future. 
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