Forbes 400 richest: Are they leaving rest of America behind?
The new list of Forbes magazine's 400 richest Americans shows their wealth is up 13 percent thanks to rising stock and home prices. That has helped others, too. But many don't feel it.
Forbes magazine released its list of the 400 richest Americans Wednesday, and (drum roll, please) the rich have gotten richer.
As a group, the 400 saw their net worth rise by about 13 percent to some $1.7 trillion.
Is this one more sign that ordinary Americans have good reason to worry that the wealthiest are leaving them behind?
The question is a hot one for both economic and political reasons. The Forbes list is rolling out alongside recent news that about 1 in 6 Americans is in poverty, that median incomes fell in 2011, and that unemployment remains higher than 8 percent. It also comes as voters are weighing a presidential contest between a multimillionaire businessman and an incumbent whose economic plan includes raising taxes on the rich.
On one hand, the 13 percent tally may not be all that different from what millions of Americans experienced. The same forces that propelled the Forbes winners – recovering stock and real estate prices – have helped US families that are home buyers or retirement-plan savers.
The Forbes tallies were made using stock prices for the year ending Aug. 24. There isn't a gauge of overall American net worth for that precise period. But for those 12 months, the Standard & Poor's 500 stock index rose about 20 percent. And during that time, home prices have also been rising.
Yet many households don't own any stocks or mutual fund shares, and are renters rather than home buyers. So the most accurate gauge of prosperity for many Americans is whether wages are going up. On that score, the news is more disappointing. Hourly wages have remained flat over the past year.
Moreover, about 1 in 5 mortgage holders is a "negative equity" position. That means that, even with price gains over the past year, the homes are worth less than the balances due on the loans.
Recently released Census data put a finer point on how average Americans are doing relative to high-income households. The numbers, which didn't break out billionaires as a separate group, showed a contrast between the earning power of middle-income households and the high end of the income scale.
Household income has essentially fallen back to 1990 levels for the median family in America, adjusted for inflation. That household earned about $50,000 last year.
Similarly, real incomes are at 1990 levels for households at the 10th percentile – very low income households.
But at the 95th percentile, just four rungs from the "top 1 percent," real household income is up 18 percent since 1990.
The very richest, meanwhile, have seen rapid gains in their wealth. In today's dollars, the Forbes 400 Americans had net worth of $480 billion in 1990. The people in that group today have more than three times that level of wealth.
President Obama has been arguing that, given their prosperity, households in the top 2 percent should be asked to pay more in taxes. He says this isn't class warfare, but basic fairness at a time when federal deficits are high and ongoing investments in things like education are needed. He says millionaires should pay at least 30 percent of their income in federal taxes.
Republican challenger Mitt Romney says he favors a tax code that's progressive, and where the rich pay at least the same share as they do now. But he says a jobs recovery will be fastest if taxes remain low for all Americans.