Older People Have All the Wealth

"And you know why they made the new twenties? Cause I got all the old ones."
April 27, 2018, 2pm PDT | Casey Brazeal | @northandclark
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Graham Prentice

Inequity in the United States continues to grow, and that inequity is increasingly generational. Older Americans own the lion's share of homes and properties, and as the value of these properties increases, so does the wealth gap.

Politicians talk a fair amount about income inequality, but wealth inequality, which includes not just wages but also the value of properties and investments, paints a starker picture of further inequality. Over the past few decades that inequity has become increasingly a difference between the old and young. "Since 1989, all of the net increase in wealth has been experienced by households now aged 65 and older. The wealth of those aged 55 to 64 is essentially the same is in 1989 (up just 3 percent); those under 55 are decidedly poorer; the average wealth of those 35 to 44 is 43 percent less than in 1989, and for those 45 to 54, is 33 percent less than in 1989," Joe Cortright writes for CityObservatory.

A lot of this disparity is driven by the value of homes, because a home is the largest asset that many households have. As the value of homes went up, it drove wealth to homeowners who had owned their properties for long enough to benefit from that increase. "In short, younger adults have seen their housing equity shrink precipitously, while older Americans have experienced a rapid increase in their housing equity," Cortright reports.

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Published on Monday, April 23, 2018 in City Observatory
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