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The 3 million richest Americans have greater combined wealth than 291 million

Bernie Sanders on midterm elections 
Senator Bernie Sanders on midterm elections, 2024 presidential election 08:55

America's current economic woes are eliciting comparisons to the 1980s — another era with sky-high inflation, rising interest rates and jittery financial markets, not to mention a taste for heavy eye makeup.

But most Americans today are far worse financially than they were three decades ago, according to a new analysis from the Congressional Budget Office.

In 1989, the year "The Simpsons" first went on the air, the poorest 50% of Americans held 4% of the nation's total wealth. Thirty years later, their share of wealth has shrunk to 2%, the CBO found. As for the middle and upper-middle-class — households between 50% and 90% of the income distribution — their piece of the pie over shrank from one-third three decades ago to 26% in 2019. 

By contrast, the top 10% of income-earners have increased their take and now hold two-thirds of total wealth in the U.S., with most of the gains concentrated among the top 1%.

Another way to think of it: The 3 million people who make up the wealthiest 1% of Americans are collectively worth more than the 291 million that make up the bottom 90%. The disparity would be even more stark if the report only counted marketable wealth and ignored the benefits of defined-benefit payments, such as pension plans or Social Security, the CBO noted.

The report was requested by Senator Bernie Sanders, a Vermont independent who made rising inequality the centerpiece of his two presidential campaigns.

"We are living in a society where the people on top, the billionaire class, is doing phenomenally well, and working people are falling further and further behind," Sanders told CBS Mornings.

"There has been a massive redistribution of wealth in the last 50 years," he added. "We're talking about trillions of dollars going to the 1% while the working and middle class become poor."

The nation's shifting financial fortunes underscore the deep structural changes in the economy since the U.S. loosened trade, largely eliminated pensions, cut higher-education funding and saw union membership drop to historic lows.

Home equity, long a springboard for working-class people to achieve upward mobility, played a relatively small role for the wealthiest, according to the CBO. Instead, the largest contributor to upper-echelon wealth was business equity, investment real estate, financial securities and inheritance trusts, the CBO found.

For Americans in the the 51st-to-90th percentile by income, retirement funds such as 401(k)s or IRA plans steadily increased as a portion of wealth since 1989. 

For the poorest half, meanwhile, wealth stagnated between 1989 and 2007 and plummeted during the Great Recession, which wiped out trillions in home equity. Since the housing crash, the poorest 25% has also fallen deeper into debt. Today, the 30 million families in the lowest rung are each worth less than $18,000, with most having a negative net worth, meaning they owe more in debt than they have in assets.

Largest form of debt: Student loans

Thirty years ago, most poorer Americans' debt consisted of mortgages and car loans. Since 2016, however, student loans have emerged as their biggest source of debt.

To be sure, the overall wealth of the nation has increased fivefold since the late 1980s. In terms of raw numbers, the poorest half has more than they did the year the Berlin Wall came down.

But that increase hasn't translated into a higher standard of living for America's poorest. An analysis released Wednesday by the Financial Times finds that while the U.S. and U.K. have some enormously wealthy people, the poorest Americans are worse off than their European counterparts, with a lower standard of living than their peers in Belgium, Denmark, France, Ireland or Germany.

"The rich in the U.S. are exceptionally rich — the top 10% have the highest top-decile disposable incomes in the world," the FT wrote. "But the bottom decile struggle by with a standard of living that is worse than the poorest in 14 European countries including Slovenia."

"Essentially, U.S. & U.K. are poor societies with some very rich people," the FT said.

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