Affluence in the United States
Affluence in the United States has been attributed in many cases to inherited wealth amounting to "a substantial head start":[8][9] in September 2012, the Institute for Policy Studies found that over 60 percent of the Forbes richest 400 Americans had grown up in the top 5% of households.
U.S. government data not only reveal the nation's income distribution but also the demographic characteristics of those to whom the term "affluent", may be applied.
[15] Wealth in the United States is commonly measured in terms of net worth, which is the sum of all assets, including the market value of real estate, like a home, minus all liabilities.
[21] For example, a household in possession of an $800,000 house, $5,000 in mutual funds, $30,000 in cars, $20,000 worth of stock in their own company, and a $45,000 IRA would have assets totaling $900,000.
These discrepancies exist because the many wealth building tools established by the Federal Government work better for high earners.
The benefits of these plans, however, are only available to workers and families whose incomes and expenses allow them excess funds to commit for a long period, typically until the investor reaches age 59½.
[19][29] Source: U.S. Census Bureau (2004): "Income, Poverty, and Health Insurance Coverage in the United States: 2003", p. 36 et seq.
[8][9] In September 2012, according to the Institute for Policy Studies, "over 60 percent" of the Forbes richest 400 Americans "grew up in substantial privilege".
Normalizing for age and experience is rarely an effective statistical compensation, as each elderly citizen began as inexperienced.
[53] However, according to the federal reserve, "For most households, pensions and Social Security are the most important sources of income during retirement, and the promised benefit stream constitutes a sizable fraction of household wealth" and "including pensions and Social Security in net worth makes the distribution more even".
[55][53] Economists and related experts have described America's growing income inequality as "deeply worrying",[56] unjust,[57] a danger to democracy/social stability,[58][59][60] and a sign of national decline.
[61] Yale professor Robert Shiller, who was among three Americans who won the Nobel prize for economics in 2013, said after receiving the award, "The most important problem that we are facing now today, I think, is rising inequality in the United States and elsewhere in the world.
According to U.S. Census Bureau statistics, this 'upward shift' is most likely the result of a booming housing market which caused homeowners to experience tremendous increases in home equity.
[20] Zhu Xiao Di (2004) notes, that household wealth usually peaks around families headed by people in their 50s, and as a result, the baby boomer generation reached this age range at the time of the analysis.
[63] By the fourth quarter of 2010, the household net worth had recovered by a growth of 1.3 percent to a total of $56.8 trillion.
Top-earning professions include medicine, dentistry, law, engineering, finance, and corporate executive management.
[66] Additionally, higher level workers with advanced degrees are hired to share their personal knowledge, to conceptualize, and to consult.
In addition to physicians, lawyers, physicists, and nuclear engineers were all among the nation's 20 highest paid occupations with incomes in excess of $78,410.
The middle 50 percent earned between $83,180 and $108,140 a year (as in the Occupational Outlook Handbook, 2008–09 Edition by the U.S. Bureau of Labor Statistics).
[76] These statistics reveal that the majority of those employed full-time with professional or doctoral degrees are among the overall top 10% (15% if including those who work part-time) of income earners.
[78] According to a 2016 study by the Pew Research Center, Jewish again ranked as the most financially successful religious group in the United States, with 44% of Jews living in households with incomes of at least $100,000, followed by Hindu (36%), Episcopalians (35%), and Presbyterians (32%).
[86] Hispanics, who were the prevalent minority in the general population of income earners, constituted only 5.2% of those in the top 10%,[88] with African Americans being the least represented with 5.1%.
To put it another way, the high income is intended to ensure that the desired individuals obtain the necessary skills (e.g. medical or graduate school) and complete their tasks with the necessary vigor[93] but differences in income may, however, be found among occupations of similar sociological nature: the median annual earnings of a physician were in excess of $150,000 in May 2004, compared to $95,000 for an attorney.
Overall, high status positions tend to be those requiring a scarce skill and are therefore commonly far better compensated than those in the middle of the occupational strata.
In reality other factors such as discrimination based on race, ethnicity and gender as well as aggressive political lobbying by certain professional organizations also influence personal income.
[13] In contemporary America it is a combination of all these factors, with scarcity remaining by far the most prominent one, which determine a person's economic compensation.
Due to higher status professions requiring advanced and thus less commonly found skill sets (including the ability to supervise and work with a considerable autonomy), these professions are better compensated through the means of income, making high status individuals affluent, depending on reference group.
As a result, the dual income phenomenon presents yet another problem in equating affluence with high societal status.
[70][94] Despite household income rising drastically through the union of two economic equals, neither individual has advanced his or her function and position within society.
The total household net worth rose 1.3% by the fourth quarter of 2009 to $54.2 trillion, indicating the American economy is recovering.
