When analysts at Oxford Economics recently studied American spending patterns, they found that the bottom 60 percent of earners was essentially drawing on their savings just to maintain their lifestyles. Their incomes weren’t enough to cover expenses.
“Many people are still living on a paycheck-to-paycheck basis,” said Gregory Daco, head of U.S. economics at Oxford.
The top 10 percent of the country holds 73 percent of its wealth, a share that has crept steadily up since 1986, according to the World Inequality Database. The most sweeping gains are concentrated among the top 1 percent; this group holds nearly 39 percent of the wealth. And they’re arguably poised to become even more prosperous because Trump’s tax cuts largely favored the wealthiest taxpayers.
Contrast that with the middle 40 percent, a group that would historically be considered middle class. In 1986, they held 36 percent of the country’s wealth; now, it’s just 27 percent.
Worse off is the bottom 40 percent of Americans: They have a negative net worth and almost no financial cushion in case of an emergency.
Most Americans can’t draw on stocks, rental properties, capital gains or significant home equity to generate cash. They depend almost exclusively on wages. And after adjusting for inflation, the government reported that Americans’ average hourly earnings haven’t budged over the past 12 months.