Incomes are up, the stock market is soaring and home prices in the United States have largely recovered from the mortgage meltdown. But Americans still haven't regained all the wealth they lost and, on the whole, are worse off than in 1998.
The Federal Reserve has just released its Survey of Consumer Finances, which it carries out every three years. This year's report tells a stubbornly grim tale. Median net worth for all families, measured in 2016 dollars, dropped 8 per cent since 1998. The survey's definition of families includes single people and childless couples and is equivalent to how other government surveys define households. In addition:
• The lowest income families - the bottom fifth - saw their net worth fall 22 per cent
• Hardest hit is the working class, the second-lowest income tier, whose net worth declined 34 per cent
• Families in the middle, with incomes from US$43,501 to $69,500, treaded water, up just 3.5 per cent
• For the top 10 per cent, net worth rose 146 per cent since 1998. In 2013, the last time the survey was done, net worth for the top 10 per cent had risen about 75 per cent since 1998.
Net worth is what people own - their houses, cars, retirement and savings accounts - minus what they owe in mortgages, student loans, credit cards and car loans. An analysis of the 2016 data shows that people in the lowest two income bands are getting squeezed from both ends.
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Americans own less and owe more
Median debt for all families increased by 25 per cent since 1998 but rose much more sharply for the lower and working classes. Debt was up 57 per cent for those with incomes below $25,300 and up 58 per cent for those with incomes between $25,301 and $43,500. By contrast, debt for the middle class - households with incomes from $43,501 to $69,500 - rose 12.5 per cent.
The top 10 per cent, those with incomes above $177,100, saw a surge in debt as well. The median amount they owed rose 61 per cent - but the value of their assets more than doubled. Contrast that with the lower class, who saw the median value of their assets slide by 47 per cent, and the working class, whose asset value declined 27 per cent.
Homeownership dropped in all income categories but most steeply in the bottom three. The homeownership rate fell 11 per cent for the lower class, 7 per cent for the working class and 5 per cent for the middle class. Among the highest-earning families, the decline was less than 2 per cent. The value of their homes, though, rose 66 per cent, compared with 25 per cent overall.
Why net worth matters
The decline in wealth actually started long before the recession, says sociologist Fabian Pfeffer, research assistant professor at the University of Michigan's Institute for Social Research. The housing bubble, which peaked in 2007, obscured the fact that many Americans had been losing ground since the 1980s, he says.
Economists can debate precisely why so many people have taken it in the teeth in recent decades, but it is clear that years of stagnant or dropping incomes have taken a toll on their ability to get ahead.
The Fed survey shows the median family income before taxes peaked in 2004; by 2013, it had fallen more than 12 per cent. Incomes have since recovered somewhat but are still 4 per cent lower than that high-water mark.
Less income means less money to invest in homes, educations and retirement. Less investment leads to less wealth. Less wealth means being less able to help the next generation get started with education and down payments. And so the gap widens.
If all boats were rising, tax cuts that benefit mostly the affluent wouldn't be a crisis. Under current circumstances, though, too many people are sinking or barely staying afloat. Lawmakers should focus their concern on those folks, not the ones in the yachts.
Liz Weston is a columnist at NerdWallet, which shares its columns with Associated Press, a certified financial planner and author of Your Credit Score
First Person
Richard Flanagan
Chatto & Windus
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
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The 12 Syrian entities delisted by UK
Ministry of Interior
Ministry of Defence
General Intelligence Directorate
Air Force Intelligence Agency
Political Security Directorate
Syrian National Security Bureau
Military Intelligence Directorate
Army Supply Bureau
General Organisation of Radio and TV
Al Watan newspaper
Cham Press TV
Sama TV
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
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Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
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PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
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Classification of skills
A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation.
A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.
The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
Key products and UAE prices
iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
Price: Dh4,229
iPhone XS Max
It is expected to be a grander version of the iPhone X with a 6.5-inch screen; an inch bigger than the screen of the iPhone 8 Plus.
Price: Dh4,649
iPhone XR
A low-cost version of the iPhone X with a 6.1-inch screen, it is expected to attract mass attention. According to industry experts, it is likely to have aluminium edges instead of stainless steel.
Price: Dh3,179
Apple Watch Series 4
More comprehensive health device with edge-to-edge displays that are more than 30 per cent bigger than displays on current models.
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
SERIE A FIXTURES
Saturday (UAE kick-off times)
Atalanta v Juventus (6pm)
AC Milan v Napoli (9pm)
Torino v Inter Milan (11.45pm)
Sunday
Bologna v Parma (3.30pm)
Sassuolo v Lazio (6pm)
Roma v Brescia (6pm)
Verona v Fiorentina (6pm)
Sampdoria v Udinese (9pm)
Lecce v Cagliari (11.45pm)
Monday
SPAL v Genoa (11.45pm)
