A historic economic shift has occurred in the United States—one that underscores the growing concentration of wealth and the erosion of the financial power traditionally held by the middle class. As of the second quarter of 2023, the top 1% of earners in the U.S. now own more household wealth than the entire middle class combined. This moment is the culmination of a decades-long trend that has seen the wealthiest Americans accumulate an ever-larger share of national resources, while the middle class steadily loses ground.
According to data from the Federal Reserve covering the period from 1993 to 2023, the share of total household wealth held by the middle class has been in continuous decline. In 1993, middle-class earners—defined as those between the 20th and 80th percentile of income—controlled just over 36 percent of all U.S. household wealth. Over the following years, this number saw only slight fluctuations until the early 2000s, when the downward trend began to accelerate. The decline became more pronounced around the 2008 financial crisis, with middle-class wealth falling below 30 percent by that time. The trend persisted even through the recovery years that followed, as gains in the economy disproportionately benefited those at the top of the income spectrum. By 2023, the middle class’s share of household wealth had fallen to under 27 percent.
In stark contrast, the wealth held by the top 1% has shown an almost uninterrupted upward trajectory. Starting at about 16 percent in 1993, the top 1% gradually expanded their share throughout the late 1990s and early 2000s. Though there were slight dips around major financial disruptions, such as the dot-com crash and the Great Recession, the overall trend remained upward. From 2010 onwards, the rise became even more pronounced. The top 1% crossed the 20 percent mark and continued climbing, overtaking the middle class by 2023 with a share that also reached just above 27 percent.
This inversion—where the top 1% now possess more household wealth than the combined middle class—is not just symbolic; it reflects a growing imbalance in the U.S. economy. Middle-class Americans have faced stagnating wages, rising costs of housing, education, and healthcare, and diminishing returns on traditional assets like savings and pensions. Meanwhile, the wealthiest Americans have reaped the benefits of rising stock markets, capital gains, and favorable tax policies, allowing their net worth to increase at a far faster rate.
The long-term implications of this shift are significant. With wealth becoming increasingly concentrated in the hands of a small elite, economic mobility becomes harder to achieve for the average worker. The middle class, once considered the engine of American prosperity and stability, is shrinking not just in numbers but in financial influence. This situation raises important questions about policy priorities, tax structures, wage growth, and investment in public services.
This data, sourced from the Federal Reserve, defines the middle class as earners between the 20th and 80th percentile of income. The shift that has occurred over the past 30 years marks one of the most dramatic changes in wealth distribution in modern American history, underscoring the urgent need to re-examine the frameworks that support economic equity in the country.
Disclaimer:
This article is for informational purposes only and is based on publicly available data from the Federal Reserve. It does not constitute financial advice or a political opinion. Readers are encouraged to conduct their own research or consult with a qualified financial advisor before drawing conclusions or making investment decisions.
