Net worth falls for majority as wealth grows

The median net worth of American households declined between 2000 and 2011, the Census Bureau said Thursday in a report that showed the steepest drops experienced by minorities and people under age 55.

The wealth drop in the bottom 60 percent was so great that it more than offset healthy increases in the net worth of the top 40 percent. As a result, median household net worth for the nation as a whole fell by more than $5,000 over a little more than a decade, a decline of almost 7 percent.

The Census Bureau report offered statistical evidence that the nation is growing increasingly polarized economically, between those who are faring very well while a majority fall further behind with every passing year.

The report examines the median net worth of households measured by assets, not income. It likely understates the net worth of the wealthy and upper middle classes because it does not include assets like equities in pension funds, the value of life insurance policies and possessions like furniture and jewelry.

The top fifth of all households rose the most, both in dollars and as a percentage. Their median wealth went up more than $61,000, or 11 percent, from about $569,000 to over $630,000.

The next group behind them also went up, rising $18,000, about 10 percent, from $188,000 to $206,000.

Because the census report covers a period that ends after a recession that left many homeowners underwater on their loans, the sharpest declines in the bottom 60 percent may represent to a large degree the value of houses that are worth less than the amount owed.

People who are 65 and older had the biggest increase in their median net worth. Middle aged people, from 35 to 54, had the biggest declines.

There are notable differences based on race and ethnicity. For a majority of non-Hispanic whites, median wealth increased by 3.5 percent. African Americans saw their overall net worth drop by 37 percent. Among Hispanics, the median went down 42 percent.

That disparity added to a growing wealth gap.

White households as a group had a median net worth that was almost 11 times more than black households in 2000. Eleven years later, white wealth was almost 18 times greater than for blacks.

However, African Americans in the top fifth of all households saw their median net worth go up dramatically, rising 63 percent over the decade. It also rose appreciably for Hispanics in the most affluent fifth, about 18 percent while non-Hispanic whites in that group had the smallest increase of all, 12 percent.

Carol Morello writes about demographics and the census, as well as a lot of other stuff that comes down the pike. She has worked at the Washington Post since 2000.
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