The good people at Too Much, the online newsletter of Inequality.org have another sobering but powerful article this week. The rather amazing and disturbing finding: the wealth of the average American family is up over the last 25 years, but the wealth of the median family has actually dropped. If this finding leaves you scratching your head, it boils down to the fact that the rich have become so rich that they’re dragging up the overall average even though typical families are faring worse. This is from the article:
The growing wealth of these affluent, the new Fed data show, is driving up America’s average family net worth. But straight averages can mislead — and even deceive. If nine people each have zero net worth and a tenth person holds a fortune worth $10 million, the average person in that 10-person group will be a millionaire.Medians, by contrast, tell us more about how everyday people are truly faring. At the median point, half the people in any distribution have more, half less. In 1989, the new Fed Survey of Consumer Finances details, the median — most typical — U.S. family held $84,800 in net worth, after adjusting for inflation.
In 2013, America’s most typical families held only $81,200, 4 percent less.