In the first two years of the financial recovery, from 2009 to 2011, only the richest 7 percent of Americans benefited and rebuilt their net worth, according to a study released Tuesday by Pew Research Center. The remaining 93 percent of Americans saw their wealth actually shrink.
The richest 7 percent of Americans saw their average household wealth, measured as assets minus liabilities, rise by almost 30 percent. By contrast, the average wealth of the remaining households dropped by 4 percent.
In 2009, the richest 7 percent were nearly 18 times richer than the rest of the population. That gap increased to a ratio of almost 24-to-1 in 2011, according to the study. At the end of 2011, the richest 7 percent possessed 63 percent of the country's wealth, up from 56 percent in 2009.
The stock market's bull run is responsible for much of the gain enjoyed by the rich and for the widening wealth gap. More of the wealthy are invested in the stock market, while the average person's wealth is typically tied up in a home. During the period covered by the Pew study, the Standard & Poor's 500 index gained 34 percent, while the housing market continued to slide.
But as the housing market begins its own recovery, more average Americans will see a boost in their home equity, which will increase their overall wealth. Since the rich will also benefit from the housing recovery, the wealth gap likely won't get narrower.
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