Apologies to President Business but Tami Luhby suggests that perhaps it’s not, America’s Middle Class: Poorer than you think:
Americans’ average wealth tops $301,000 per adult, enough to rank us fourth on the latest Credit Suisse Global Wealth report.
But that figure doesn’t tell you how the middle class American is doing.
Americans’ median wealth is a mere $44,900 per adult — half have more, half have less. That’s only good enough for 19th place, below Japan, Canada, Australia and much of Western Europe. [Ed.: We’re five spots behind Spain. You may recall that Spain has been a bit of a mess economically for the past six or so years. We’re five spots behind them.]
“Americans tend to think of their middle class as being the richest in the world, but it turns out, in terms of wealth, they rank fairly low among major industrialized countries,” said Edward Wolff, a New York University economics professor who studies net worth….
Home ownership rates are higher in many European countries than in the U.S., giving Joe European more assets to his name than his American counterpart. Plus, it’s easier for Americans to borrow money, which eats away at their net worth, said Jim Davies, an economics professor at Western University in Ontario, Canada, and co-author of the Credit Suisse report….
Middle class Americans were also hurt greatly by the housing collapse at the end of the last decade. The median wealth of families was $77,300 in 2010, a nearly 40% drop from 2007, according to Federal Reserve statistics….
Middle class Australians, by comparison, are leading the pack. The country’s residents have the highest median net worth, coming in at $219,500. Australia also has low wealth inequality.
This is in part because Australians have a strong tradition of home ownership, though escalating prices have made it tougher for young adults to secure the Australian Dream. Those down under also have a mandatory retirement savings program, where they must squirrel away more than 9% of their income for their Golden Years [Ed.: Link with additional info], and they carry relatively low credit card and student loan debt….
Americans, meanwhile, are having trouble building wealth because wages have stagnated for more than a decade. Median household income was $51,017 in 2012, compared to $56,080 in 1999, according to the Census Bureau’s most recent statistics.
Thanks to Brad DeLong for calling attention to Luhby’s piece. (If you don’t check DeLong’s blog on a regular basis you should.)
In other news, Elizabeth Warren addressed the Netroots Nation conference last week: