David Rosnick and Dean Baker have just published The Wealth of Households: An Analysis of the 2016 Survey of Consumer Finance. As with everything from their thinktank, it’s readable, balanced and somewhat alarming: it suggests that America’s 125 million households are poorer than China’s 252 million urban households.
Yes, those are urban Chinese households, but you get the point. People unconsciously worship wealth and beauty and want to be like wealthy, beautiful people–or at least look like them sometimes. So when people start realizing that, hey! We used to be ten times richer than them and suddenly the Chinese are richer than us? What’s going on?
How long before people start asking their governments, “Why can’t you make us as at least as rich as the Chinese?” Then–and only then–we’ll start seeing social and financial reforms.
Anyway, here are David and Dean’s findings [my emphasis], followed by some comparable data on urban Chinese families.
- The average net wealth of near-retirees.. households headed by someone between the ages of 55 and 64–was $195,500 in 2016, up slightly from $181,000 in 1989 but well below the 2004 peak of $329,300. (All numbers are in 2016 dollars.) The homeowners in the middle quintile among this age cohort had a 58.5 percent equity stake in their homes in 2016, up from 54.6 percent in 2013, but far below their 81.0 percent stake in 1989. Their non-housing wealth in 2016 averaged $99,200, down from a peak of $165,700 in 2004.
- The second-from-the-bottom quintile in this age group, near-retirees, on average had a 45.6 percent equity stake in their home. Their non-housing wealth averaged just $25,200.
- The equity stake for the middle quintile of older prime-age workers (ages 45-54) averaged 43.8 percent in 2016, down from 72.2 percent in 1989. Their non-housing wealth averaged $62,700.
- The equity stake for the second quintile of older prime age workers averaged 26.7 percent. This compares with an equity stake of 63.9 percent in 1989. Non-housing wealth for the second quintile averaged $18,000.
- The net wealth for the middle quintile of mid-career workers (ages 35 to 44) averaged $61,100 in 2016. This is down from $107,100 in 1989. The average housing equity for this group was $27,500. That compares to $65,500 in 1989.
- The average net wealth among the middle quintile of students and young workers (ages 18 to 34) was $12,200 in 2016. This is down from a peak of $20,200 in 1995. The bottom quintile among this age group had net debt averaging $88,700, most of which was student loan debt.
- The average net wealth among the middle quintile of recent retirees was $228,300. This is up from $147,500 in 1989, but 18 percent below the peak of $279,200 in 2007.
Now let’s see how total wealth, urban and rural, is distributed in the USA, France and China:
This does not fit very well with home ownership patterns in the USA and China–which calls for further investigation:
In the meantime, here are some Chinese figures that’ll make you thoughtful:
|The minimum wage continues doubling every decade and, though Western economists warn that high employment costs discourage hiring, the job market remains tight and complaints of labor shortages are widespread. According to The New York Times, “Waves of migrant workers from the countryside filled China’s factories for the last three decades and helped make the nation the world’s largest manufacturer. But many companies now find themselves struggling to hire enough workers. And, for the scarce workers they do find, pay has more than quintupled in the last decade”.