"Over the past two decades, income and wealth inequality have increased in the U.S. as high- and very high-income households have commanded rising shares of income and wealth," Moody's analysts wrote in the research report.
"The top 10 percent of income earners have seen their overall median net worth increase by almost 200 percent since 1995, while the bottom 40 percent of income earners have experienced a decline in median net worth over the same period."
A number of factors help explain why the rich are outdistancing other Americans, including globalization, more stringent job requirements, the disappearance of middle-class jobs, surging college costs and eroding union membership. While inequality has been rising for decades, the trend threatens to intensify after recent policy changes such has a 2017 tax law that disproportionately benefits higher-income households and big corporations, according to Moody's.
The level of inequality in the U.S. is higher than in other major economies, according to Moody's, noting that the so-called Gini coefficient -- a standard measure of how wealth and income are distributed in a country -- shows that things have gotten "substantially" worse in the U.S. since 1990.
Adding to the growing income and wealth gap in the U.S. are “comparatively unaffordable” college costs. The average expected cost of tuition and fees for a four-year bachelor’s degree in the U.S. is around $60,000, equivalent to about 120% of average disposable household income, versus 6% in Germany.
Low- and middle-income households also may turn to
debt to keep afloat, leading to financial crises like the housing crash.
"The top 10 percent of income earners have seen their overall median net worth increase by almost 200 percent since 1995, while the bottom 40 percent of income earners have experienced a decline in median net worth over the same period."
A number of factors help explain why the rich are outdistancing other Americans, including globalization, more stringent job requirements, the disappearance of middle-class jobs, surging college costs and eroding union membership. While inequality has been rising for decades, the trend threatens to intensify after recent policy changes such has a 2017 tax law that disproportionately benefits higher-income households and big corporations, according to Moody's.
The level of inequality in the U.S. is higher than in other major economies, according to Moody's, noting that the so-called Gini coefficient -- a standard measure of how wealth and income are distributed in a country -- shows that things have gotten "substantially" worse in the U.S. since 1990.
Adding to the growing income and wealth gap in the U.S. are “comparatively unaffordable” college costs. The average expected cost of tuition and fees for a four-year bachelor’s degree in the U.S. is around $60,000, equivalent to about 120% of average disposable household income, versus 6% in Germany.
Low- and middle-income households also may turn to
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