The economic recovery, which began in 2009, has brought disproportionate gains to the wealthiest Americans, while the majority of households experienced a decline in worth, according to research released this week from the Pew Research Center.
The top 7 percent of households--measured in terms of household wealth--experienced a 28 percent increase in net worth from 2009 to 2011, while the remaining 93 percent of American households experienced a 4 percent decline in worth, according to Pew.
The major factor contributing to this disparate change in wealth among American households is that wealthier households tend to hold more of their worth in financial holdings, while home values tend to contribute most to the value of less wealthy households.
Financial holdings, including stocks and bonds, tend to make up about 65 percent of the wealth of households with $500,000 or more in net worth. Homes contribute just 17 percent to these households' net worth.
In contrast, for households with less than $500,000 in net worth, home values contribute about 50 percent to net worth, and financial holdings contribute about 33 percent, according to Pew Research Center.
In an economic climate in which the S&P 500 rose 34 percent and the S&P/Case-Shiller Home Price Indices declined 5 percent--which occurred between 2009 and 2011--it is easy to see how wealthier households gained more wealth while less wealthy households experienced a reduction in net worth.
Among the top 8 million households, mean wealth increased from about $2.48 million to about $3.17 million. The remaining 111 million households felt their mean wealth decline from about $140,000 to about $134,000.
The mean worth of the wealthiest households was nearly 24 times the mean worth of households in the bottom 93 percent of wealth by the end of 2011. In 2009, when the recovery started, wealthy households held less than 18 times the wealth of their less-affluent counterparts, according to Pew.
The upper 7 percent of households held 63 percent of the nation's aggregate household wealth in 2011, up from 56 percent in 2009, according to Pew.