You probably know the numbers on income inequality by now: The share of all income going to the top 1 percent of Americans now stands at around 20 percent, which is a big and disturbing number. But what about wealth inequality?
Income is a relatively straightforward matter of wages and compensation. Wealth is more mercurial: It can be a physical asset like a car, house, or land. But it can also be a stock or bond or other financial asset.
The effects of wealth also go much deeper: If you own a piece of land, you can decide what uses that land gets put to. Same thing if you own a building. If you own someone else’s debt, you have tremendous legal power over their livelihood. If you own shares in a company, you have input into its governance: Where does it invest? Who does it hire? What does it pay? Income decides your standard of living, but wealth gives you control over the shape and future course of the economy.
And if you think income inequality is bad, well, you ain’t seen nothing yet. As of 2015, the top 1 percent of American households in terms of wealth ownership enjoy 35 percent of the pie all by themselves. The top 10 percent own a staggering 76 percent of all wealth.
Furthermore, from 1963 to 2013, families in the bottom 10 percent of wealth ownership went from having no wealth at all on average to being $2,000 in debt. Over the same time period, the average wealth of the top 10 percent grew four times over. For the top 1 percent, it grew six times over. These shifts are far larger than the changes in the distribution of income over the same time frame.