Wealth gap widens to record level

“The latest data reinforces the larger story of America’s middle-class household wealth stagnation over the past three decades,” Pew said. “The Great Recession destroyed a significant amount of middle-income and lower-income families’ wealth, and the economic ‘recovery’ has yet to be felt for them.”

In Pew’s definition, middle-income households are those earning between two-thirds and twice the median income, after adjusting for household size. The median marks the halfway point.

For example, a one-person household was categorized as middle income if its earnings last year were at least $22,000 but less than $66,000. For a four-person family to qualify as middle income, earnings would have to be at least $44,000 but less than $132,000.

Based on these thresholds, 46 percent of American households were classified as middle income last year. One-third were considered lower income, and 21 percent upper income.

Incomes represent wages and other earnings such as interest and profits, whereas wealth is the value of stocks and other assets such as homes and cars, minus debts.

The Pew data shows that lower-, middle- and upper-income households all have yet to recover the wealth lost in the Great Recession. But higher-earning families had the smallest percentage loss of wealth from 2007 to 2010.

Seen over a longer period, the typical wealth of upper-income households in 2013 was about double what it was in 1983, after adjusting for inflation.

For middle-income households, there was practically no change in wealth over the 30-year period. The median wealth for the middle class was $94,300 in 1983. That peaked at $158,400 in 2007 and has since retreated to $96,500.