160,000 US households control as much wealth as the poorest 90 percent

We've heard a lot about growing concentration of wealth in the hands of the very few. That's not new or surprising. But what is new and surprising is just how few of those hands there really are.  

You've heard about the 99 percent and the 1 percent. In the United States, about 30 percent of household wealth is held by the richest 1 percent of the population, and it's this small group, we've been told, that's to blame for the growing gap between the richest and poorest. 

Not exactly. It turns out the group driving income inquality is way smaller than one percent of the population, and the wealth disaparity is even more unfair than we thought.

How small? How unfair ? A new study shows the top 0.1 percent have the same amount of wealth as the bottom 90 percent. And, even more than the top 1 percent, it's this tiny group of people that's been driving inequality in the United States. 

University of California economist Emmanuel Saez and London School of Economics economist Gabriel Zucman came to this conclusion after studying the income and property tax records of the richest families in the US over the last three decades. They honed in on a mega-mega-rich group of just 160,000 households, each with net assets of more than $20 million, that saw its share of wealth go from 7 percent in 1979 to a staggering 22 percent in 2012 — the highest level since the Great Depression. 

At the same time, the bottom 90 percent of households saw their share of wealth go from a high of 35 percent in the mid-1980s to about 23 percent in 2012.

Yup, almost exactly the same share as the 0.1 percenters.

How did this happen? According to Saez and Zucman:

“The key driver of the rapid increase in wealth at the top is the surge in the share of income, in particular labor income, earned by top wealth holders" and "an increase in saving rate inequality." 

That makes sense: the more you earn, the more houses you can buy, the more you can save, and the more interest you can earn on those savings. Just ask Bill Gates. 

The bottom 90 percent, however, have seen their share of wealth shrink because stagnating wage growth reduced their ability to squirrel away money, while surging debt levels outstripped growth in their pension funds.

“The key driver of the declining bottom 90% share is the fall of middle-class saving, a fall which itself may partly owe to the low growth of middle-class income, to financial deregulation leading to some forms of predatory lending, or to growing behavioral biases in the saving decisions of middle-class households.”

Of course, wealth inequality isn't a problem unique to the United States. Not by a long shot. As Oxfam pointed out in a recent report, it's a global issue.

But that's cold comfort for 90 percent of Americans.