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Growing wealth gap among rich

By Judy Martel · Bankrate.com
Wednesday, April 9, 2014
Posted: 6 am ET

When it comes to a growing divide among the haves and have-nots, forget the top 1 percent of wealthiest individuals: The real wealth gap is happening between the top .01 percent and the rest of the rich.

hedging-retirement-risks-3-inflationAccording to a study out of the University of California-Berkeley, that elite group of super-rich is the only one to see real gains in the past 30 years, while everyone else has treaded water or seen their wealth decrease.

The study, by Berkeley economics professor Emmanuel Saez and Gabriel Zucman, assistant professor at the London School of Economics, uses IRS data going back to 1913 to conclude that since the early 1980s, the wealth held by the top .01 percent of the population has nearly quadrupled.

In 1980, the richest of the rich held approximately 3 percent of the wealth. And today, they possess just under 12 percent.

Maintaining is not gaining

To be a member of the .01 percent club requires a net worth of at least $100 million. The threshold for the top 10 percent of the 1-percenters, or the 0.1 percent, is $20 million.

Since the 1980s, 99 percent of the richest 1 percent of the population, which had been the target of public protests such as the Occupy Wall Street movement, are simply maintaining. The "middle" rich, or those falling within the top 10 percent to 1 percent, have been losing ground.

The super-rich are getting so much richer for a variety of reasons, including a disproportionate rise in income versus the rest of the top 1 percent. In general, the wealthy also invest more in the stock market, and they continued to increase their savings even during the economic downturn, the study found. The 99-percenters had a massive drop in savings rates in the decade leading up to the financial crisis in 2008-2009.

Bankrate conducted its own analysis of the income gap over the past 20 years and found that those entering their prime earning years are falling behind.

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