Wealth Gap Widens Between Americans
The wealth gap between older and younger Americans has widened dramatically, according to a study released Monday.
The study done by the Pew Research Center, which looks at new data released by the Census Bureau, found that, households headed by adults ages 65 and older had 47 times as much net wealth as households headed by someone under 35 years of age.
In 1984, the ratio was only 10-to-1.
Household wealth is counted as the sum of all assets, including home ownership, savings account, minus the sum of all debts such as student loans and credit cards.
In 2009, the median net worth of a household headed by someone 65 or older was $170,494, a 42 percent increase from the net worth in 1984.
In contrast, the net worth of a under-35-year-old's household in 2009 was $3,662, which is a 68 percent decrease from what it was in 1984.
The study found that housing is the principle cause of the widening gap, since many older homeowners bought their homes at pre-bubble prices. On the flipside, declining home equity has hurt many young households.
"Rising home equity has been the linchpin of the higher wealth of older households in 2009 compared with their counterparts in 1984," Pew says. "Declining home equity has been one factor in the lower wealth held by young households in 2009 compared with their counterparts in 1984."
Other areas where older adults are gaining and younger adults are losing are annual income and homeownership.
The young adult group--those under 35--were hit the hardest by the so-called Great Recession of 2007-2009.
People in this age bracket faced difficulty entering the labor market and delays in getting married, two cornerstones of adulthood that are typically mark an increase in net wealth.
