Is It a Problem If One Percent of Americans Possess 50% of American Wealth and Assets?

Is it a problem if one percent of Americans possess 50% of American wealth and assets?

Kelvin Howard
PHI 103 Informal Thinking
Instructor Stephen Krogh
February 25, 2013

One percent of Americans possess more cash, stocks and property than the assets of 155 million Americans combined. How could it be that 400 people have more wealth than half of the more than 100 million U.S. households?
The distribution of wealth pertains to allotment of wealth in a given place and/or time. It measures the application of wealth at any given moment and can also point out if the owner of this wealth is becoming more concerted or more democratic. The distribution of wealth is usually cited as the amount of wealth owned by each individual (or family or household) relative to the total wealth of a society. Since the supply of wealth summarizes differences in prosperity owning among persons.
The most common methods of calculating the inequality or distribution of wealth is measuring the percentages of total wealth owned by selected percentages of a sample population. Individuals are ranked by Economist according to their wealth and report the shares of the total wealth that are owned by proportions of the population. For example, the top 1, 5, and 10 percent of wealth holders owns what percentage of the total wealth. ...Encyclopedia of Urban America: The Cities and Suburbs...
Studies of the dissimilarity of wealth often analyze the demographic and economic correlates of individual wealth holding and how these correlates affect dissimilarity. These studies show that the most significant demographic characteristic in determining wealth is age; typically, wealth increases with age. People have a tendency to save while they’re employed, and then devour their savings after they retire.
Occupation and nativity also affects the ownership of wealth. Professionals and Merchants generally have higher incomes than manual and unskilled laborers, and they tend to be overrepresented among the wealthy.
Historically, immigrants to the United States arrive with little or no wealth. However, the income of immigrants increases more rapidly than Native Americans. This can perhaps be attributed to wealth holdings. Economic historians have long known that the distribution of wealth has been highly unequal throughout American history; a small percentage of the population has always owned a disproportionately large share of the wealth. Yet it is nearly impossible to determine long-term trends in the inequality of wealth because there are no consistent, representative data for extended periods of time. It is possible, however, to survey a number of studies to understand wealth inequality in different periods.
This can always become a problem if the economy and the disproportion of wealth reach epidemic proportions. Whereas, if civil unrest develops, and the masses of underprivileged individuals surreptitiously unite; and take over the wealth of the privileged. However, with the protection of the police departments, military, federal agents and bureaucracies sworn to protect the privileged, it’s not likely that a rebellion would succeed.

References
• Feldstein, Martin S. “Social Security and the Distribution of Wealth.” Journal of the American Statistical Association 71 (1976): 800–807.
• Gallman, Robert E. “Trends in the Size Distribution of Wealth in the Nineteenth Century: Some Speculations.” In Soltow, Lee, ed., Six Papers on the Size Distribution of Wealth and Income Studies in Income and Wealth, 1–30. New York: Columbia University Press, 1969.
• Herscovici, Steven. “The Distribution of Wealth in Nineteenth Century Boston: Inequality among Natives and Immigrants, 1860.” Explorations in Economic History 30 (1993): 321–335.
• Kuznets, Simon. “Economic Growth and Income Inequality.” American Economic Review 45 (1955): 1–28.
• Kuznets, Simon. Shares of Upper Income Groups in Income and Savings. New York: Columbia University Press, 1953.
• Lampman, Robert J. The Share of Top Wealth-Holders in National Wealth, 1922–1956. Princeton, NJ: Princeton University Press, 1962.
• Main, Gloria L. “Inequality in Early America: The Evidence from Probate Records of Massachusetts and Maryland.” Journal of Interdisciplinary History 7 (1977): 558–581.
• Miller, Herman P. Income Distribution in the United States. Washington, DC: Government Printing Office, 1966.
• Pope, Clayne L. “Households on the American Frontier: The Distribution of Income and Wealth in Utah, 1850–1900.” In Galenson, David W., ed., Markets in History: Economic Studies of the Past, 148–189. New York: Cambridge University Press, 1989.
• Shorrocks, Anthony F. “Inequality between Persons.” In Eatwell, John, Milgane, Murray, and Newman, Peter, eds., The New Palgrave Dictionary of Economics, vol. 2, 821–824. London: Macmillan, 1987.
• Soltow, Lee. “Distribution of Income and Wealth.” In Porter, Glenn, ed., Encyclopedia of American Economic History, 1087–1119. New York: Scribners, 1980.
• Soltow, Lee. Men and Wealth in the United States, 1850–1870. New Haven, CT: Yale University Press, 1975.
• Soltow, Lee. “The Wealth, Income, and Social Class of Men in Large Northern Cities of the United States in 1860.” In Smith, James D., ed., The Personal Distribution of Income and Wealth, Studies in Income and Wealth, 233–276. New York: Columbia University Press, 1975.
• Soltow, Lee. “Wealth Inequality in the United States in 1798 and 1860.” Review of Economics and Statistics 66 (1984): 444–451.
• Weicher, John C. The Distribution of Wealth: Increasing Inequality?. Washington, DC: AEI Press, 1996.
• Wilcox, Nathaniel T. “Understanding the Distribution of Urban Wealth: The United States in 1860.” In Fogel, Robert W., Galantine, Ralph A., and Manning, Richard L., eds., Without Consent or Contract: The Rise and Fall of American Slavery: Evidence and Methods, 419–458. New York, W. W. Norton, 1992.
• Wolff, Edward N. “Changing Inequality of Wealth.” American Economic Review 82 (1992): 552–558.

References: • Feldstein, Martin S. “Social Security and the Distribution of Wealth.” Journal of the American Statistical Association 71 (1976): 800–807. • Gallman, Robert E • Herscovici, Steven. “The Distribution of Wealth in Nineteenth Century Boston: Inequality among Natives and Immigrants, 1860.” Explorations in Economic History 30 (1993): 321–335. • Kuznets, Simon • Kuznets, Simon. Shares of Upper Income Groups in Income and Savings. New York: Columbia University Press, 1953. • Lampman, Robert J • Main, Gloria L. “Inequality in Early America: The Evidence from Probate Records of Massachusetts and Maryland.” Journal of Interdisciplinary History 7 (1977): 558–581. • Miller, Herman P • Soltow, Lee. “Distribution of Income and Wealth.” In Porter, Glenn, ed., Encyclopedia of American Economic History, 1087–1119. New York: Scribners, 1980. • Soltow, Lee • Weicher, John C. The Distribution of Wealth: Increasing Inequality?. Washington, DC: AEI Press, 1996. • Wilcox, Nathaniel T • Wolff, Edward N. “Changing Inequality of Wealth.” American Economic Review 82 (1992): 552–558.