Most Americans below the upper echelon have suffered a decline in wealth in recent decades. The median household saw its net worth drop to $57,000 in 2010, down from $73,000 in 1983. It would have been $119,000 had wealth grown equally across households.
The top 1%, on the other hand, saw their average wealth grow to $16.4 million, up from $9.6 million in 1983. This is due in large part to the growing income inequality divide, as well as the sharp rise in value of stocks over the period.
Overall, the widening of the wealth gap in recent decades is due to two things, Shierholz said. The increase in income inequality means the wealthy have more to save and invest every year. Furthermore, the growth of Wall Street means that the rich, who are much more likely to own stocks, accumulated wealth even faster.
"The growth in wealth we did see got funneled to the top and it didn't spur faster growth in the middle," Shierholz said.