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Median family wealth down 1/3 from 2003 levels

Except in this case, that's not what's being said. They're splitting the population up into percentile segments based on wealth. Then for each of those segments, they're calculating the median wealth for that segment.

So in this case, even though it's confusing, they really are talking about the median wealth for the 50th percentile segment, as opposed to the median wealth for the 95th percentile segment.

What they're really saying is that the wealthiest got wealthier and everyone else got less wealthy... which isn't really news, is it?

ETA: It might (or might not) be worth noting that yes, the 95th percentile is higher than their 2003 levels, but that's mostly a result of them having experienced significant growth between 2003 and 2007. Everyone has lost ground since then. It's all about what you pick as your starting point. If you choose 1984, then the 75th percentile and higher have all improved - not just the 95th percentile. Statistics are a pain.
 
Emily Lake said:
Except in this case, that's not what's being said. They're splitting the population up into percentile segments based on wealth. Then for each of those segments, they're calculating the median wealth for that segment.

So in this case, even though it's confusing, they really are talking about the median wealth for the 50th percentile segment, as opposed to the median wealth for the 95th percentile segment.

What they're really saying is that the wealthiest got wealthier and everyone else got less wealthy... which isn't really news, is it?

ETA: It might (or might not) be worth noting that yes, the 95th percentile is higher than their 2003 levels, but that's mostly a result of them having experienced significant growth between 2003 and 2007. Everyone has lost ground since then. It's all about what you pick as your starting point. If you choose 1984, then the 75th percentile and higher have all improved - not just the 95th percentile. Statistics are a pain.
Click to expand...

I think Jayjay is right. The study refers to 95%ile, 75%ile, etc. wealth (excluding real estate). Those are numbers in and of themselves, not bands of wealth distribution.

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Jimmy Higgins said:
Loren Pechtel said:
In other words, real estate crashed.
Click to expand...
Below 1984 levels?
Click to expand...

It doesn't need to be below 1984 levels to get that graph.

The problem is a lot of people who bought houses and then saw the value of the house go down with the real estate collapse.

We bought in the mid 90s, saw the value of our house more than double and then with the crash it was back to what we paid for it. The woman across the street that moved into assisted care last year was the second owner--and lost something like $100k from the housing collapse.
 
One trouble with family (or household) wealth statistics is they are sensitive to the make up of the family/household.
eg When my sister and her husband started a family, she gave a reasonably well paying job, and in exchange, their household expenses went up considerably. Their household wealth plummeted! Of course this shows another problem with the statistics. They would both feel themselves much better off as a result of the change in family circumstances.

Or when my friend Ruth got divorced, one household became two, each worse off (in purely material terms) than the original household. Although as individuals they weren't worse off at all. Much better off when you consider their mental well-being!
When she got remarried the reverse happened (except for the mental well-being, which I think went up again).

Or when I moved out of my parents' house and got my own place, long after getting a job. Their household wealth fell, as my income was no longer contributing to that figure, but a new household had arisen. But again, nobody was really worse off here (I won't even go into the effects of not having to live my parents).

That's not to say the conclusions are necessarily wrong - when you take into account all these sorts of things, the situation might be better than what is claimed, but it might be even worse. But until you do take these things into account, you just don't know.
 
Loren Pechtel said:
The problem is a lot of people who bought houses and then saw the value of the house go down with the real estate collapse.
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That and their wages haven't been going up but instead any potential raises have been kept as additional profits for the companies and redistributed to shareholders and executives.
 
Loren Pechtel said:
Jimmy Higgins said:
Below 1984 levels?
Click to expand...

It doesn't need to be below 1984 levels to get that graph.

The problem is a lot of people who bought houses and then saw the value of the house go down with the real estate collapse.

We bought in the mid 90s, saw the value of our house more than double and then with the crash it was back to what we paid for it. The woman across the street that moved into assisted care last year was the second owner--and lost something like $100k from the housing collapse.
Click to expand...

Can the housing crash alone explain why people at the 25th and 5th percentile lost even a higher % of their wealth than people at the 50th percentile? The people who lost the most home value were those that bought really high, and people well below the 50th percentile could not have afforded to buy homes at such high prices and most of them didn't buy homes at all. The effect of the housing crash should have hit the people hardest who were the most likely to buy homes and most able to buy them at greatly inflated prices.
 
doubtingt said:
Loren Pechtel said:
It doesn't need to be below 1984 levels to get that graph.

The problem is a lot of people who bought houses and then saw the value of the house go down with the real estate collapse.

We bought in the mid 90s, saw the value of our house more than double and then with the crash it was back to what we paid for it. The woman across the street that moved into assisted care last year was the second owner--and lost something like $100k from the housing collapse.
Click to expand...

Can the housing crash alone explain why people at the 25th and 5th percentile lost even a higher % of their wealth than people at the 50th percentile? The people who lost the most home value were those that bought really high, and people well below the 50th percentile could not have afforded to buy homes at such high prices and most of them didn't buy homes at all. The effect of the housing crash should have hit the people hardest who were the most likely to buy homes and most able to buy them at greatly inflated prices.
Click to expand...

A lot of those in the lower part of the spectrum got the liar loans and then were wiped out in the crash.
 
doubtingt said:
Loren Pechtel said:
It doesn't need to be below 1984 levels to get that graph.

The problem is a lot of people who bought houses and then saw the value of the house go down with the real estate collapse.

We bought in the mid 90s, saw the value of our house more than double and then with the crash it was back to what we paid for it. The woman across the street that moved into assisted care last year was the second owner--and lost something like $100k from the housing collapse.
Click to expand...

Can the housing crash alone explain why people at the 25th and 5th percentile lost even a higher % of their wealth than people at the 50th percentile? The people who lost the most home value were those that bought really high, and people well below the 50th percentile could not have afforded to buy homes at such high prices and most of them didn't buy homes at all. The effect of the housing crash should have hit the people hardest who were the most likely to buy homes and most able to buy them at greatly inflated prices.
Click to expand...
"The 50th percentile" etc is not a fixed person or group of people. Someone who is in the 50th percentile, spends more than he can really afford on a house and loses big in a crash, will no longer be at the 50th percentile. He might be only at the 10th percentile. The comparison you are now making is not him with himself before the crash, but him with the person who was previously at the 10th percentile.

On the other hand, that latter person, by not having enough money or borrowing power to buy a house, might have moved up the percentile ladder simply by virtue of not having lost in the crash. He might be at the 20th percentile, and not really be any worse off than before. But falsely imagining him to be the same person as the former 20th percentile person might erroneously lead you to believe he is worse off than before (because the 20th percentile is now at a lower level of overall wealth).
 
Hey Eric, the 50th percentile used to have wealth of around $85,000. Now the 50th percentile is under $60,000. That's a change for the worse no matter how much you want to nitpick.
 
Loren Pechtel said:
doubtingt said:
Can the housing crash alone explain why people at the 25th and 5th percentile lost even a higher % of their wealth than people at the 50th percentile? The people who lost the most home value were those that bought really high, and people well below the 50th percentile could not have afforded to buy homes at such high prices and most of them didn't buy homes at all. The effect of the housing crash should have hit the people hardest who were the most likely to buy homes and most able to buy them at greatly inflated prices.
Click to expand...

A lot of those in the lower part of the spectrum got the liar loans and then were wiped out in the crash.
Click to expand...
Guess what? A lot didn't.
 
ksen said:
Hey Eric, the 50th percentile used to have wealth of around $85,000. Now the 50th percentile is under $60,000. That's a change for the worse no matter how much you want to nitpick.
Click to expand...

It might be, but not necessarily as explained in my first post.

To give a trivial example imagine 3 households with wealth as follows:
1. $40,000
2. $85,000
3. $100,000
50th percentile = $85,000

The highest earning couple now get divorced and split everything 50/50.

The new situation is
1. $40,000
2. $50,000
3. $50,000
4. $85,000
50th percentile = $50,000

So the 50th percentile household wealth has dropped substantially, but it is not clear whether this is a change for the worse (everybody might be happier with the new arrangement).
 
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