Perception vs. Reality: Wealth Inequality in the U.S.

Apr 21, 2014

Question: what percentage of U.S. wealth is held by the top 20% of households?

A)     45%

B)      55%

C)      65%

D)     >75%

If you guessed "D," you are correct. The top quintile of Americans now hold nearly 90% of the country’s wealth. And this trend has only gotten worse in recent decades.

There are several factors that have played into a continuing wealth disparity. For starters, non-home wealth has played a vital role in determining affluence. To illustrate, the Great Recession of 2008 and subsequent recovery saw the stock market bounce back and make investors money while the housing market remains relatively stagnant. Since lower income people tend to have a greater share of their wealth concentrated in home values, they have been disproportionately affected. This is one of several factors shaping the persistent inequality in the U.S.

While this reality seems grim, there is a silver lining. One practice has consistently been associated with getting a larger share of the American income pie: going to school. About one-half of all household income is brought in by someone with at least a bachelor’s degree, and the gap between the share of income earned by those who attended college and those who did not continues to grow.

While the unequal distribution of wealth persists in America, it is promising to see the financial stakes improving for an increasingly educated population. The infographic below explores some trends in wealth distribution, as well as how the perception of Americans sometimes departs from the reality.

Please reference the visual for a full list of sources.

Perception vs. Reality: Wealth Inequality in the U.S.

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