Two recent surveys released by the U.S. Census Bureau and the Federal Reserve confirm that family net worth has taken a dramatic downturn in the recent recession. The survey’s findings shine a harsh light on the devastation inflicted by the reckless behavior of the financial industry in its manipulation of the housing market, and also explain why the country and families are struggling to recover.
The U.S. Census Bureau shows Gen X suffered greatest loss
According to the U.S. census report released on June 18, the annual Survey of Income and Program Participation, which takes a detailed look at the financial situation of all Americans, the median net worth decreased for all age groups between 2005 and 2010. (Net worth is the value of assets minus debt.) Those in the Gen X age group , now in who are now in their mid 40s to mid 50s, took the biggest hit in the economic downturn
For households in the 45 to 54 year old range, median net worth declined by $54,881 to $90, 434, or a 38 percent drop from 2005 to 2010, adjusted for 2010 dollars. For the entire population, the median household income declined by 35 percent, or $66, 740. According to Census Bureau economist Alfred Gottschalck, the overall decline in net worth is due to a decline in housing values and stock market losses.
A Federal Reserve survey shows record drop in net worth
Americans suffered a gut-wrenching decline in wealth between 2007 and 2010, according to the Federal Reserve Survey of Consumer Finances released on June 11. The Federal Reserve conducts the Survey of Consumer Finances every three years, so the latest numbers compare family finances in 2007 and 2010. The Fed reported a bigger drop in net worth than the Census Bureau, putting it at 38.8 during the three-year period. According to Fed economists, this was the biggest drop in net worth since 1989, when they began the survey.
According to the Fed survey, the median net worth plunged to $77,300 in 2010 from $126,400 in 2007. The 2010 levels were similar to those in 1992. Like the economists at the Census Bureau, the Fed economists blamed the decline on “a broad collapse in housing prices.”