Statistics


Asset Poverty
Between 1983 and 1998, income poverty declined about 16 percent, while asset poverty rose 14 percent. Today, fully one-quarter of the United States population is asset-poor. This means that, if they had to live only on their net worth -- savings, home equity and other assets -- they could survive at the poverty level for three months. Take away home equity, or just consider liquid assets, and the poverty rate jumps to nearly 40 percent.1

46.8% of asset poor families actually have zero or negative net worth.2

26 percent of white children, 52 percent of African-American children, and 54 percent of Hispanic children start life in households without any resources for investment.3

Debt
In 2005, household debt amounted to over 130% of disposable personal income.4

In 2004, it took about a fifth of income from a middle-class family to service their debt.5

Approximately one in four low-income households had debt-service obligations that exceeded 40% of their income, as did 13.7% of middle-income households.6

In 2005 the total value of all forms of outstanding household debt stood at 18.6% of all assets. All debt as a share of disposable personal income was also at its highest at 131.8%.7

In 2005, 9 out of every 1,000 adults declared bankruptcy.8

Effects of Assets
One quarter of today's population has a legacy of asset ownership that can be directly linked to the Homestead Act.9

The GI Bill has generated returns of up to $12.50 for every dollar invested.10

Recent evidence suggests that assets:11
* Are associated with household economic stability
* Decrease economic strain on households
* Are associated with educational attainment
* Decrease marital dissolution
* Decrease the risk of intergenerational poverty transmission
* Increase health and satisfaction among adults
* Increase property values
* Decrease residential mobility
* Increase property maintenance
* Increase local civic involvement

Financial Services
Nearly 10 million (9.2%) households do not have a bank account of any kind, including almost 5.7 million (32%) families earning less than $15,000 a year.12

Homeownership
In 2004, the top 20% by wealth class held 65.4% of total housing equity while the bottom 80% held just 34.6%.13

In 2005, 68.9% of all households owned their own homes.14

In 2005, 72.7% of white households were homeowners compared to 48.2% and 49.5% of black and Hispanic households, respectively.15

In 2005, mortgage debt, as a percentage of disposable income was at its highest point ever at 95.8%.16

In 1947 mortgage debt was about 17% of all debt, but by 2005 that share had increased to 96%.17

Individual Development Accounts (IDAs)
In Individual Development Account Programs:18
* Monthly net deposits averaged about $19
* Accountholders saved about $1 for every $2 that could have been matched
* Deposit were made about 6 of every 12 months
* With an average match of 2:1, total accumulations in IDAs were about $700 per account each year
* 32% made a matched withdrawal. Of those, 28% were for home purchase, 23% for microenterprise, 21% for postsecondary education, and 18% for home repair.

Inequality
In 2004 the top fifth of households held 84.7% of all wealth, while the middle fifth held a mere 3.8%, and the bottom fifth actually had negative net wealth—they owed 0.5% of all wealth.19

Between 1962 and 2004, the top fifth increased their share of wealth by 3.7 percentage points, while the bottom four fifths gave up that percentage.20

The ratio of median-to-average wealth over time has been decreasing, down from .27 in 1962 to .18 in 2004, reflecting a faster increase in average wealth than median wealth.21

In 1962 the wealth of the top 1% was 125 times the median; by 2004 that number had risen to 190.22

The top 1%, the next 9%, and the remaining 90% each own one-third of the nation's wealth.23

Wealth inequality is greater than income inequality. The top 20 percent of households earn about 56 percent of the nation's income -- but command 83 percent of our wealth. The bottom 60 percent, the majority of the country, earns 23 percent of the nation's income -- but owns less than 5 percent of the wealth. And the bottom 40 percent earns 10 percent of national income but owns less than 1 percent of the wealth.24

Through tax breaks and incentives, the federal government spends over $300 billion a year to enable nonpoor households to accumulate assets-tax deductions for home mortgage interest, favorable treatment for contributions to retirement or college-savings plans, myriad benefits for small business ownership, and stock investment. However, these benefits are beyond the reach of low-income households: over 90 percent of tax benefits for asset building accrue to households earning more than $50,000 a year. Moreover, many low-income persons face strict asset limits in public assistance programs. Accordingly, public policy encourages asset accumulation for better-off Americans while discouraging it for others.25

Net Worth
In 2004, 17% of all households had zero or negative net worth, while 29.6% had net worth of less than $10,000.26

In 2004, more than twice the percentage of black households (29.4%) as white households (13.0%) had zero or negative net worth.27

In 2004, the average black household had a net worth equal to just 19% of the average white household. The ratio fell to a mere .14 from 1998 to 2001 as black wealth increased by just 5% compared to a 34% increase in white wealth.28

In 2004, the median black household had a net worth of $11,800, or just 10% of the corresponding figure for whites.29

Post-Secondary Education
Those with college degrees or higher can expect to earn $2.1 to $3.4 million over their lifetime, compared to $1.2 million for high school graduates.30

56 percent of non-Hispanic whites, 45 percent of African-Americans, and 29 percent of Hispanics have completed at least some type of post-secondary education.31

Retirement
In 2004, 27.2% of households headed by someone age 47 to 64 expected retirement income to be inadequate, meaning they did not have the resources to place at least half of current income based on expected pension, Social Security benefits, and returns on personal savings.32

In 2004, 24.1% of white households were not expected to have adequate means in retirement, compared with 39% of black and Hispanic households.33

More than 70 million Americans have no access to a tax-subsidized payroll-deduction saving plan.34

Savings/Savings Rate
In 1984, the personal savings rate stood at 10.4% of disposable personal income. In 2002, the personal savings rate was 3.9% of disposable income.35

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1 Haveman, R. & Wolff, E. (2001). Who are the Asset Poor? Levels, Trends, and Composition, 1983-1998. Madison, WI: Institute for Research on Poverty at the University of Wisconsin-Madison.
2 State of Working America 2006-2007, Economic Policy Institute
3 Boshara, R. (January 2003). The $6,000 Solution. The Atlantic Monthly.
4-8 State of Working America 2006-2007, Economic Policy Institute
9 Williams, T. (2000). The Homestead Act: A Major Asset-Building Policy in American History. St. Louis, MO: Center for Social Development at Washington University.
10 Boshara, R. (2003). The $6,000 Solution. The Atlantic Monthly.
11 Page-Adams, D. & Scanlon, E.(2001).Assets, Health, and Well-Being: Neighborhoods, Families, Children, and Youth. St. Louis, MO: Center for Social Development at Washington University.
12 Craig Copeland, using the Federal Reserve Board's 2001 Survey of Consumer Finances.
13-17 State of Working America 2006-2007, Economic Policy Institute
18 Schreiner, M., Clancy, M. & Sherraden, M. (2002).Saving Performance in the American Dream Demonstration. St. Louis, MO: Center for Social Development at Washington University
19-22 13-17 State of Working America 2006-2007, Economic Policy Institute
23 Kennickell, A. (2003). A Rolling Tide: Changes in the Distribution of Wealth in the U.S., 1989 to 2001. Washington, D.C.: The Federal Reserve Board.
24 Wolff, E. (2000). Recent Trends in Wealth Ownership, 1983-1998. Annandale-on-Hudson, New York: Levy Economics Institute at Bard College.
25 Joint Committee on Taxation, Estimates of Federal Tax Expenditures. Washington, D.C.: Government Printing Office.
26-29 State of Working America 2006-2007, Economic Policy Institute
30: Day, J. & Newburger, E. (2002). The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings. Washington, D.C.: U.S. Census Bureau.
31 U.S. Census Bureau (2002). Current Population Survey.
32-33 State of Working America 2006-2007, Economic Policy Institute
34 Calabrese, M. & MacGuineas, M. (January 2003). Spendthrift Nation. The Atlantic Monthly.
35 Department of Commerce